Sentences to Ponder

19 November 2008 at 10:15 am 1 comment

| Peter Klein |

Although it does very well on the share of total jobs created by new firms, America scores highest of all in terms of the percentage of its lost jobs that are destroyed by enterprises’ going out of business. Perhaps, in the spirit of Joseph Schumpeter’s theory of creative destruction, it is the ability for firms to fail — and for the entrepreneurs involved to escape without stigma — that provides the overlooked but crucial part of the American entrepreneurial culture.

That’s from an Economist story on Global Entrepreneurship Week (did you know it started Monday?) that focuses on the Kauffman Foundation’s work on collecting and analyzing global data on startups, firm growth, innovation, bankruptcy, and the like. The story opens with one of the all-time great (and probably apocryphal) Bushisms: “the problem with the French is they don’t have a word for entrepreneur.” (Thanks to Chris Boessen for the pointer.)

Entry filed under: - Klein -, Entrepreneurship. Tags: .

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1 Comment Add your own

  • 1. Donald A. Coffin  |  19 November 2008 at 12:48 pm

    I would note that if one wishes to argue that “freedom to fail” helps make the US economy stronger and more innovative, then taking policy actions that increase the costs of failure are bad public policy. I refer, of course, to changes in bankruptcy laws that lead to increases in the effective liabilities for failure.

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Nicolai J. Foss and Peter G. Klein, Organizing Entrepreneurial Judgment: A New Approach to the Firm (Cambridge University Press, 2012).
Peter G. Klein and Micheal E. Sykuta, eds., The Elgar Companion to Transaction Cost Economics (Edward Elgar, 2010).
Peter G. Klein, The Capitalist and the Entrepreneur: Essays on Organizations and Markets (Mises Institute, 2010).
Richard N. Langlois, The Dynamics of Industrial Capitalism: Schumpeter, Chandler, and the New Economy (Routledge, 2007).
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