Week 14 Reflection: Why market entrepreneurs succeed

Dr. Burt Folsom spoke at the Young America’s Foundation Conservative Student Conference, where he explains how political entrepreneurs have failed compared to market entrepreneurs. The first example Dr. Folsom uses is based on Edward Collins. Collins planned to create a steamboat company to move from New York to Liverpool in order to compete with the United Kingdom. For his company, Collins went to the U.S. government to receive subsidies to jump-start the production and usage of his steamboats. As time goes on Collins must keep increasing the number of subsidies he needs in order to keep up with the U.K. steamboats. Eventually, Cornelius Vanderbilt becomes a competitor of Collins and eventually becomes the leading steamboat company in the world. Folsom uses this example to show how privately funded enterprise works much better than publicly funded ones. In his example, Folsom is correct. Because Collins always had a plan to fall back on, he never had to find alternative innovative solutions to cut costs and improve productivity. This is the main reason why Vanderbilt succeeded. Collins in this case is also a pure political entrepreneur, possibly one of the only to ever exist. Within the context of modern society, we have many companies that receive government subsidies and contracts, however, the owners/founders of the companies are not considered political entrepreneurs. Lockheed Martin, an aerospace company, received 70% of its revenue from the United States government in 2018. While Lockheed Martin may seem like a political entrepreneurial company, they do have to compete with other aerospace companies for their subsidies and contracts. The second example Folsom uses is the creation of the airplane. He speaks about how Samuel Langley also received a government subsidy to build a working airplane, yet he failed to do so within 2 attempts. And shortly after his failures, the Wright brothers were able to successfully take off and create the first successful airplane. Both of these examples provided show how to market entrepreneurs are able to beat their political counterparts and successfully run their own businesses.

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