Demographics and Entrepreneurship blog series: Making the world richer by honouring entrepreneurs

As part of the blog series summarizing the Fraser Institute’s Demographics and Entrepreneurship essay series, this post examines the way we think, write and speak about entrepreneurs and entrepreneurship.

Contrary to what you’ve probably heard for the last five decades, more people are a blessing, not a curse. Under the right conditions, they bring more to the table than they take, and on net, make the world a better and more humane place.

Note the operative phrase, though—under the right conditions. As economic historian Deirdre McCloskey and I argue in our contribution to the essay series, leaving people alone to buy, sell, trade, experiment, innovate, succeed and fail helped convert a world where almost every life was solitary, poor, nasty, brutish, and short into a world where the World Bank estimates that as of 2013 only 10.7 per cent of the world’s population lived in “extreme poverty,” defined as less than US$1.90 per day.

As recently as 1990, that number was 35 per cent. It’s a smaller percentage of a much larger population, and even the absolute number of the world’s extremely poor has fallen, from 1.85 billion in 1990 to 767 million in 2013.

The Great Enrichment of the human species has been relatively sudden and relatively recent, historically speaking. Since the caves, our ancestors lived in grinding poverty. Then, around 1750 or so, in a dysfunctional backwater of the Eurasian landmass, people stumbled into sustained economic growth. It happened because we learned how to innovate and because we learned how to love innovators and entrepreneurs.

In short, the West got rich and the Rest started following because of sudden changes in how we write, think and speak about entrepreneurs. Instead of seeing innovation as troublesome heresy or offense against the God-ordained social order, people came to see innovation as something that was positively virtuous. Or at least tolerable.

People adopted what my coauthor McCloskey has termed the Bourgeois Deal: “leave me alone, and I’ll make you rich.” It stands in sharp contrast to what she calls the Aristocratic Deal, or “honour me, an aristocrat and your better by the accident of birth, do as I say, pay your taxes under threat of prison or death or worse. Think not that you have the right to seek ‘protection’ from another sovereign. Go forth, do battle, and shed others’ blood and your own in my name and for my glory, and by the third act of our little drama I at least will not have slaughtered you.”

Innovate, under those circumstances? What’s the point, if one’s life and destiny and living and dying were controlled from above? Why, when doing so was rebellion against your lot in life—having been made to suffer, like Akira Kurosawa’s peasants and George Lucas’ droids?

Things began to change slowly, surely, haltingly and imperfectly in the eighteenth century. People began, as a result of a confluence of happy accidents in Europe beginning with the Protestant Reformation in 1517, to afford liberty and dignity to the bourgeoisie—to the innovators, the buyers, the sellers, the people who flooded England with “a wave of gadgets.”

This isn’t to say that the bourgeoisie somehow became more ethical—far from it. Rather, people started to tolerate and eventually celebrate the virtuous parts of bourgeois life. Consider how we honour one of those most bourgeois of pastimes—getting a good deal on something. Which crowned head or noble of the sixteenth century would have been thought especially praiseworthy for getting a good deal on socks or peanut butter? And yet we routinely applaud and imitate the virtues of thrift and prudence when our friends and families display them.

And thus do more people become a blessing rather than a curse. Esteem for bourgeois prudence and thrift is esteem for attributes that get us more and better out of progressively less and less. Combining esteem for these virtues, with what the economist Julian Simon called the Ultimate Resource (the human mind), has unleashed waves of innovation making it possible for us to sustain ever-larger populations at ever-higher standards of living.

It’s a process that shows no signs of stopping, as long as we keep our ethical wits about us and continue to celebrate—or at least tolerate—innovation and entrepreneurship.