The great Per Bylund has claimed that “Experienced entrepreneurs are Austrians.” This is because they “Develop gut feel through trial-and-error,” but they “lack explanation (theory) and terminology.” In fact, Bylund goes as far as to say that “Most entrepreneurs fail most of the time often because they are not Austrians.” This makes sense considering Austrians put such heavy emphasis on entrepreneurship. A successful entrepreneur would greatly appreciate and understand claims like Mises’ “The driving force of the market, the clement trending toward unceasing innovation and improvement, is provided by the restlessness of the promoter.” A simple Austrian claim like the argument that the main issue for business is to lower costs below price which must be below the subjective value of the consumer makes perfect sense to a successful entrepreneur because he or she has spent his or her entire career doing exactly that. As Bylund explained, a career of trial-and-error has given these successful entrepreneurs a gut instinct for all of our principles.
In this past year, however, we have seen this fact begin to make itself much more evident. Back in August Jack Dorsey, co-founder and former CEO of Twitter, tweeted a link to Anatomy of The State by Murray Rothbard here on the Mises Institute’s website. Additionally, Dorsey regularly professes his interest in sound money with other Tweets claiming “#wtfhappenedin1971” as a reference to the US officially severing any remaining ties to the gold standard. More recently sharing “’Transitory’” as a shot at the fact that all the inflation we have been seeing has been sold to us as transitory despite the obvious untrue nature of this claim. As a proud Bitcoin maximalist it would make sense that Dorsey would have an interest in sound money, but it makes even more sense to take one step back and see that it is a gut instinct as an entrepreneur that would draw him to both Bitcoin and sound money thoughts as a whole. Menger once argued that
Entrepreneurial activity includes: (a) obtaining information about the economic situation; (b) economic calculation – all the various computations that must be made if a production process is to be efficient
Mises contributed to this that
What economic calculation requires is a monetary system whose functioning is not sabotaged by government interference.
Jack Dorsey, as an entrepreneur spent a career economically calculating. Whether he initially had the theory and terminology or not, he spent his entire professional life developing his instincts and learning more and more that he could do so better with sound money. As that went on he’s demonstrated a newfound interest in Austrian economics because entrepreneurs are at their core Austrians.
Dorsey was not the only big name in business that has come forward with Austrian adjacent beliefs. CEO of Tesla – as well as several other companies – and 2021 Time Magazine Person of the Year, Elon Musk, recently said in an interview “The government is simply the biggest corporation, with a monopoly on violence and where you have no recourse.” Whether he has actually read Anatomy of The State or not, one who has read it can clearly hear his gut channeling its inner Rothbard as it states something so close to Rothbard’s “Briefly, the State is that organization in society which attempts to maintain a monopoly of the use of force and violence in a given territorial area.” At another point in the same interview, Musk takes on another fairly Austrian stance:
The rules and regulations keep increasing every year. Rules and regulations are immortal, they don’t die. Occasionally you see some law with a sunset provision, but really, otherwise, the vast majority of rules and regulations live forever… eventually it just takes longer and longer and it’s harder to do things. There’s not really an effective garbage collection system for removing rules and regulations. And so gradually this hardens the arteries of civilization, where you’re able to do less and less over time. So I think government should be trying really hard to get rid of rules and regulations that perhaps had merit at some time but don’t have merit current.
Musk, with or without a series of economics textbooks, from his experience in the business world understands the dangers of these regulations which lead to the problems of the Seen, the Unseen, and The Unrealized as explained by Per Bylund:
In reality, regulations are not what politicians promise. They are not actions to help people. They are restrictions on entrepreneurs’ economic behavior. Entrepreneurs are aiming at satisfying customers’ wants as much as possible. Regulations aim to restrict this customer-satisfying action by forbidding certain innovations, or declaring that they must be designed and implemented in ways that have value for the regulator and not for the customer or entrepreneur.
Entrepreneurs are forced to abandon some of their efforts to generate new value by satisfying customers, or to redirect their efforts into less value-producing channels. The potential output of their creativity goes Unrealized.
Musk and Dorsey throughout this past year espousing Austrian adjacent principles have shown that those engaging in entrepreneurship pick up the logic of Austrianism by their experience matching exactly what we teach. However, while they are two high profile easy examples to demonstrate this, this happens with the millions of entrepreneurs all across the country. Everyone engaging in entrepreneurship, in “the pursuit of making productive factors more valuable than their current market prices indicate,” is learning more and more the principles of Austrian economics through their real-life experience. It is our job to recognize this, encourage this, and give them the theory and language to further dive into this and better serve their role – as Mises says – as “The driving force of the market.”
