Dr. Burt Folsom, in a speech discussing entrepreneurship and its history in the United States, had some very strong arguments against political entrepreneurship. Political entrepreneurship is that which uses government subsidies to fund their business and keep it going. This idea is shown in countless ways throughout the United States' history, but in particular, when steamships came around. The thought was that, Great Britain is surging ahead in advancements and since the U.S. was experiencing a budget surplus, then the government should help the U.S. catch up to Great Britain and be competitive. Although this thought, in hindsight, does not seem that bad - helping businesses start up so that it can help entrepreneurs seemingly would do good. However, as the story goes, the entrepreneur continues to ask for more and more money and Congress continuously grants it - eventually spending 11 million dollars on subsidies for steamships (Folsom, min 40). However, during this time period, another entrepreneur completely separate from the government came and made steamships and ended up putting the entrepreneur who relied on government subsidies out of business. He completely funded the project and because of that, aimed to make more money than he was spending because there was not this government check that would bail him out.
What does that story really mean?
Well, this example, along with countless others throughout the history of the U.S., show that although the thought of helping businesses start up sounds really nice, it eventually just leads to more budget deficit and is not helpful in providing a boost forward when compared to competitors. Dr. Folsom, when questioned about the opportunities that it provides those that may not have the funds to start up their business, said that this simply leads to a second-rate country. When the government decides what is kept in business, as opposed to the consumer, it is more hurtful than it is helpful. Why would the government simply keep businesses from failing? If there is not a need
(decided by the consumer), then it should fail or adapt to what that need is.
What do I think?
I absolutely agree with Dr. Folsom. The U.S. is a land of opportunity, but it is also a land of greatness and if someone wants to work hard and create a business then I think that is awesome. I do not think that it is the government's job to make that happen, because then it produces a reliance and a culture of laziness rather than competitiveness.
Source: https://www.c-span.org/video/?294883-2/burt-folsom-myth-robber-barons