>
 
 
Entrepreneurship 
 as Emancipation: The History of an Idea
 
A Lecture Delivered 
 at the Free University of Berlin, July 12, 20061 
 
 
By 
 
 
Fritz Fleischmann
 
Babson College 
 
 
I. The Three 
 E00 
 
Today is the last event in 
 a lecture series entitled 00ntrepreneurship 00Qualifikation der 
 Zukunft.00I became interested in this topic some time ago, for a simple 
 reason: for the last 23 years, I have been teaching at Babson College 
 in Massachusetts, which several decades ago embraced entrepreneurship 
 as the way of the future. Not only do we teach entrepreneurship as a 
 subject, but we practice a new pedagogy allied with it: we offer integrated, 
 cross-disciplinary learning in all programs; we practice what we preach 
 (every first-year undergraduate becomes part of a business startup, 
 for instance, learning theoretical skills while applying them to a real 
 situation); as an institution, we are committed to a global engagement. 
 Our rankings seem to support our commitment 00in 2006, the Financial 
 Times ranked our MBA program the No. 1 in Entrepreneurship worldwide). 
 Our graduates are in demand 00for instance, 97% of our undergrads 
 have a job or are in graduate school within three months. We have been 
 involved with NFTE from the start (one of the lecturers in this series 
 represented NFTE Germany); my colleague Michael Fetters serves on the 
 board of NFTE in New York. In entrepreneurship research, we have such 
 programs as GEM, the Global Entrepreneurship Monitor, which conducts 
 comparative studies on entrepreneurship in over two dozen nations and 
 is beginning to influence public policy worldwide. Babson has been leader 
 in entrepreneurship education, and I have been lucky to serve on its 
 faculty. 
 
      Entrepreneurship 
 is a field that involves creativity, integrated learning, openness to 
 experience. My own exposure to it occurred at a business school. However, 
 if we only define it as a business school discipline, it falls short 
 of its potential. Since I am not a teacher of entrepreneurship myself 
 but a professor of American literature, I have the advantage of marginality, 
 which sometimes enables us to see a larger picture than those inside 
 the circle. It is from this position that I dare to cast my net wide 
 today and ask a very large question: how does entrepreneurship 
 or, to use a more comprehensive term, entrepreneurial thinking, contribute 
 to 00mancipation00  
 
      00mancipation00
 carries the connotation of 00reedom,00so we must begin by asking: 
 freedom from what, and for what? In the economic context in which entrepreneurship 
 is usually discussed, we may think about emancipation from poverty and 
 dependence, and we can go from there to talk about emancipation from 
 disabilities that come with poverty and lack of power. With economic 
 self-sufficiency may come the opportunity for education and personal 
 growth; for gaining a voice in the affairs of one00 community and 
 polity; for a better understanding of the self and the world; an opportunity 
 for a reasonable degree of agency, or the ability to act and shape, 
 to determine one00 life and one00 goals, rather than accepting, 
 as a sort of fate, the circumstances into which we are thrown.
 
      As 
 you may expect from the phrase 00istory of an idea00in the title 
 of this talk, I also mean to poke around in a few places where we find 
 a connection between entrepreneurship and emancipation, and I will spend 
 a bit of time in the most interesting of these places: the transatlantic 
 phenomenon we call the Enlightenment. In fact, I will be so presumptuous 
 as to introduce a model I call the 00hree E000000a trick that 
 only works in English and is one of the reasons I have decided on this 
 language, rather than German, for my talk:  
    
 
                                        
 Emancipation  
 
Entrepreneurial 
 Thinking 
 
Enlightened 
 Self-Interest
 
Enlightenment     Entrepreneurship 
 
 
For a German audience, perhaps 
 the most familiar definition of 00nlightenment00is Immanuel Kant00 
 1784 answer to the question 00as ist Aufkl盲rung?00(00hat is Enlightenment?00, 
 in which he says that 00ufkl盲rung ist der Aufgang des Menschen aus 
 seiner selbst verschuldeten Unm眉ndigkeit,00which is usually translated 
 as 00an00 emergence from his self-incurred immaturity00or 00ependence.00
 Here is a more gender-neutral rendering: 00umanity00 emergence from 
 its self-incurred dependence.00Kant00 motto for enlightened progress 
 is: 00apere aude! Have courage to use your own understanding!00Unfortunately, 
 says Kant, out of 00aziness and cowardice,00most people prefer immaturity 
 or dependence over thinking and acting for themselves 00which is why 
 our dependence has become 00lmost second nature.00
 
      Emancipation. 
 Enlightenment. The third 0000in our triangle is 00ntrepreneur,00
 and one place to look for a definition of that term would be the history 
 of economic thought. The physiocrat Richard Cantillon is generally credited 
 with introducing the term (in a posthumous publication, 1755), although 
 the concept itself was not new. An entrepreneur is 00elui qui entreprend,00
 a person who does or undertakes something. However, the term remains 
 ambiguous for the next two centuries, although many writers stipulate 
 a meaning. In reviewing this terminological history in1982, Robert H茅bert 
 and Albert Link came up with a list of 12 overlapping definitions:
 
1.   The entrepreneur 
 is the person who assumes the risk associated with
 
      
 uncertainty.
 
      2.   
 The entrepreneur is a supplier of financial capital.
 
 
   The entrepreneur 
   is an innovator.
   The entrepreneur 
   is a decision maker.
   The entrepreneur 
   is an industrial leader.
   The entrepreneur 
   is a manager or superintendent.
   The entrepreneur 
   is an organizer or coordinator of economic resources.
   The entrepreneur 
   is a proprietor of an enterprise.
   The entrepreneur 
   is an employer of factors of production.
   The entrepreneur 
   is a contractor.
   The entrepreneur 
   is an arbitrageur.
   The entrepreneur 
   is the person who allocates resources to alternative uses. (H茅bert 
   and Link 108).
 
 
 
Although they go on to develop 
 a taxonomy of theory types (109), they admit that 00he entrepreneur 
 remains an elusive figure00(114) and entitle their final chapter 00n 
 Search of the Heffalump00(the Heffalump, you may remember, is a mythological 
 creature from the children00 book Winnie the Pooh). A decade 
 later, after the emergence of the New Economy in the United States, 
 Robert Formaini summed up a similar inventory of ideas with this definition: 
 00n entrepreneur is an ingenious, risk taking innovator who might 
 also be an imaginative manager and whose actions both disrupt and coordinate 
 our market economy00(Formaini 9). In 2003, in the best review of entrepreneurship 
 studies to date, my Babson colleague Maria Minniti (who is now the research 
 director of the GEM project) and her husband Roger Koppl offered a definition 
 based on the work of Israel Kirzner that seems to capture the widest 
 consensus available today.2 I quote:
 
      In 
 Kirzner00 work, entrepreneurship is first the 00lertness00to new 
 opportunities.
 
Entrepreneurs are alert; 
 this is what they are like. Second, entrepreneurship is   
 seizing an opportunity by taking innovative actions. Entrepreneurs innovate; 
 this is what they do. Alertness leads to the discovery of new opportunities. 
 If the opportunity discovered is a real one, the entrepreneur acts on 
 it. Alertness necessarily leads to innovative actions such as founding 
 a new venture. (Koppl and Minniti, 00arket Processes0087)
 
00lertness00as a quality 
 that leads to innovation usefully connects 00ntrepreneurship00as 
 an economic activity, and 00ntrepreneurial thinking00as a multi-dimensional 
 activity and aptitude. We00l hear more about 00lertness00later 
 in this talk. 
 
II. Examples 
 
 
That entrepreneurship may contribute 
 not only to the social mobility and political status of individuals 
 who practice it, but also quite literally to their emancipation, their 
 00iberation00from a state of unfreedom and powerlessness, could 
 be demonstrated through many historical examples. Let me take you to 
 three places you might not spontaneously associate with entrepreneurship: 
 
(1) the City of Athens in the 
 5th century B.C.; 
 
(2) the transatlantic slave 
 trade and the African American struggle for emancipation; 
 
(3) the lives of women in the 
 poverty-stricken nation of Bangladesh. 
 
   Athens: Entrepreneurship 
   for the Common Good
 
  
 
We might not expect entrepreneurship 
 to be much esteemed in a society whose philosophers held that the highest 
 human characteristic was virtue, and that virtue could best be achieved 
 by free men who did not have to labor for their daily bread. Indeed, 
 in the Athenian city state of the 5th century BC, virtue 
 was held in high regard. At the same time, however, as George Bitros 
 and Anastassios Karyannis have shown, there also existed 00 sophisticated 
 system of incentives for undertaking entrepreneurial activities and 
 for using the wealth created thereof in a socially responsible way00
 (6). This policy rested on four 00illars00
 
  First, it recognized 
 the positive impact of entrepreneurial activities for the
 
      autonomy 
 and liberty of the citizens and the strength of the city. Second, 
 
      entrepreneurial 
 activities were encouraged only in so far as they were conducted
 
      within 
 certain ethical, social and economic boundaries. Third, success 
 from 
 
      entrepreneurial 
 activities was rewarded by the city with various honours if the 
 
      accumulated 
 wealth was spent in a socially responsible manner by granting loans
 
      free 
 of interest and undertaking expensive 00iturgies00[public projects 
 financed by
 
      a 
 form of voluntary taxation] on behalf of the public. Fourth, 
 the policy provided
 
      specific 
 socio-political incentives such as social advancement to citizens and
 
      metics 
 [resident aliens] and/or liberation to slaves. (10)
 
Bitros and Karayannis discuss 
 a number of instances in which slaves were able to purchase their own 
 freedom and become respected members of the community. The most striking 
 feature about government support for entrepreneurship in ancient Athens, 
 however, is its non-individualistic purpose. Wealth, it was believed, 
 must not lead to personal luxury or waste; entrepreneurship as a wealth-creating 
 activity was justified by what it could accomplish for the common good.3 
 
 
   Slavery, the 
   African American Experience, and the Rehabilitation of Booker T. Washington
 
  
 
The period of slave trading 
 and slave-keeping in the English-speaking world produced many texts 
 that criticized and, in some instances, defended the practice. Among 
 them are famous narratives by 19th century slaves such as 
 Frederick Douglass and Harriet Jacobs, classics not only in the literary 
 genre of the slave narrative but also classics of 00merican00literature. 
 As scholars have begun to study slavery as a complex transatlantic phenomenon, 
 they have drawn attention to older Afro-British narratives of slavery 
 and liberation, the most famous of which is The Interesting Narrative 
 of the Life of Olaudah Equiano, or Gustavus Vassa, the African. Written 
 by Himself, first published in London in 1789.
 
      Equiano00 
 Interesting Narrative is a spiritual autobiography that begins with 
 an idyllic childhood in Africa and tells a story of kidnapping and enslavement, 
 complete with the horrific Middle Passage across the Atlantic to the 
 Caribbean and a plethora of abuses under the slave system as it was 
 practiced on those islands and on the North American mainland; it tells 
 of Equiano00 conversion to Christianity, his efforts for the abolition 
 of the British slave trade, his involvement with a failed recolonization 
 scheme in Sierra Leone, and his final settlement as a resident of England. 
 Equiano is a controversial figure 00not only is there evidence that 
 he may have made up his African birth, but he himself participated in 
 the purchase and sale of slaves on behalf of masters and business partners. 
 His conversion to Christianity has also been read as part of an entrepreneurial 
 self-invention that took advantage of an emerging global marketplace 
 to fashion a self defined by its ability to manipulate markets to its 
 own advantage (Hinds).
 
      But 
 it is precisely as an entrepreneur that Equiano interests us here. After 
 some years in the service of a British naval officer, he arrives back 
 in England in 1759, where he expects to be legally freed, as his master 
 had often promised him. Now, he writes, 00 thought 00of nothing 
 but being freed, and working for myself, and thereby getting money to 
 enable me to get a good education00(214). That goal is upset when 
 his master breaks his promise and has him shipped once again to the 
 West Indies. Fortunately, he is sold to a kindly merchant, in whose 
 service he learns to trade among the islands and, eventually, accumulates 
 a small amount of capital with which to trade on his own account. Always 
 hungry for new skills and knowledge (a standard feature of both slave 
 narratives and stories of entrepreneurial success), he learns navigation 
 and soon becomes his master00 most valuable employee. After several 
 more years of struggle and many setbacks, he is able to purchase his 
 freedom and is manumitted on July 11, 1766 (240 years ago yesterday).
 
      Equiano 
 is a fascinating and complex character, and of course I cannot do him 
 justice here. Let me just highlight an aspect of his tale that tends 
 to disappear behind the larger narrative of cruelty and injustice: his 
 inability to participate in the marketplace on equal terms. His life 
 as a trader is an endless experience of fraudulent behavior on the part 
 of racist whites (usually, buyers who take his goods and then refuse 
 to pay for them), of broken promises, contempt, disrespect and, not 
 infrequently, violence when he insists on his rights. Not only is he 
 repeatedly robbed of his goods and money, but he is also in danger of 
 re-enslavement by whites who want to turn him back into a commodity 
 00a fate that befell his friend Joseph Clipson. On this occasion, 
 he writes,
 
      Hitherto 
 I had thought only slavery dreadful; but the state of a free negro appeared
 
      to 
 me now equally so at least, and in some respects even worse, for they 
 live in
 
      constant 
 alarm for their liberty, which is but nominal, for they are universally
 
insulted and plundered 
 without the possibility of redress; for such is the equity of the West 
 Indian laws, that no free negro00 evidence will be admitted in their 
 courts of justice. (Equiano 232)
 
While Equiano himself is lucky 
 enough to purchase his freedom, his entrepreneurial activities that 
 lead him to that point are severely restricted by the absence of legal 
 protection, and by the institutionalized racism he encounters as a free 
 black man. That he spends so many years of his later life fighting against 
 slavery and racism and, in the process, taking care of his soul, connects 
 him to other major figures in the transatlantic abolitionist struggle.
 
      In 
 the North American colonies and the new United States, there is much 
 evidence that slaves, and later freedmen, became entrepreneurs to gain 
 freedom for themselves and members of their families. In the years following 
 the Civil War, African American business activity flourished briefly 
 but was increasingly restricted when southern states began to pass segregation 
 laws. These laws, in effect, limited the ability of African American 
 businesses to compete outside their own ethnic category, restricting 
 these businesses to a much smaller market (less than 10% of the population) 
 and African Americans themselves to being primarily consumers, rather 
 than producers. What people mostly remember about that topic today is 
 an ideological debate within the African American community that began 
 in the 1890s, intensified in the years before WW I and, after several 
 metamorphoses, continues to be with us today as a debate about what 
 to do with what William Julius Wilson has called the black 00nderclass,00
 a subject of demagoguery for generations of white politicians.
 
      Booker 
 T. Washington, the leader of Tuskegee Institute (today Tuskegee University) 
 in Alabama, became a darling of white America when he advised his fellow 
 blacks to stop asking for civil rights and higher education, and to 
 focus instead on economic progress. In two of the best-known and notorious 
 passages of his famous speech at the Atlanta Exposition of 1895, Washington 
 said:  
 
we shall prosper in proportion 
 as we learn to dignify and glorify common labour and put brains and 
 skill into the common occupations of life 00No race can prosper till 
 it learns that there is as much dignity in tilling a field as in writing 
 a poem. It is at the bottom of life we must begin, and not at the top. 
 Nor should we permit our grievances to overshadow our opportunities.
 
 (00 
 
The wisest among my race 
 understand that the agitation of questions of social equality is the 
 extremest folly, and that progress in the enjoyment of all the privileges 
 that will come to us must be the result of severe and constant struggle 
 rather than of artificial forcing. No race that has anything to contribute 
 to the markets of the world is long in any degree ostracized. 
 
 
Washington was taken to task 
 by critics who considered this position a sell-out, most famously by 
 W.E.B. DuBois in his book Souls of Black Folk 
 (published in the same year as Washington00 autobiography, Up From 
 Slavery). That book is best-known for its prescient statement that 
 00he problem of the 20th century is the problem of the 
 color line,00but what is has to say about Washington also contributes 
 to its status as a classic. His key criticism is summed up in what DuBois 
 calls the 00riple paradox00of Washington00 career:
 
   He 
   is striving nobly to make Negro artisans business men and property-owners; 
   but it is utterly impossible, under modern competitive methods, for 
   workingmen and property-owners to defend their rights and exist without 
   the right of suffrage. 
   He 
   insists on thrift and self-respect, but at the same time counsels a 
   silent submission to civic inferiority such as is bound to sap the manhood 
   of any race in the long run. 
   He 
   advocates common-school and industrial training, and depreciates institutions 
   of higher learning; but neither the Negro common-schools, nor Tuskegee 
   itself, could remain open a day were it not for teachers trained in 
   Negro colleges, or trained by their graduates.
 
 
Although he has always had 
 his defenders as well, Washington00 reputation as either an Uncle 
 Tom, or a cynical manipulator of white racism for his own purposes, 
 follows him to this day. The disenfranchisement of African Americans 
 for much of the 20th century reinforced a focus on civil 
 rights, although the later Civil Rights Movement very much involved 
 a 00ar on poverty00as well. More successful African Americans were 
 often portrayed as the 00lack bourgeoisie,00which was castigated 
 for its own class snobbery and color fetishism; sociologists after DuBois 
 generally failed to look at the potential of black entrepreneurship 
 for creating opportunity for substantial numbers of African Americans.
 
      In 
 1991, however, on the new wave of interest in entrepreneurship there 
 arrived a book entitled Entrepreneurship and Self-Help Among Black 
 Americans, by John Sibley Butler, that provides a new look at the 
 economic history of African Americans, richly embedded in the context 
 of social and political history. (I am thrilled to say that John Butler, 
 a distinguished professor at the University of Texas, has just accepted 
 an appointment as a part-time visiting professor at Babson.)
 
      In 
 this book, Butler documents how participation in an integrated marketplace, 
 even under conditions of slavery and discrimination, produces significant 
 wealth for these participants and, for many, the ability to purchase 
 their own freedom. He cites many instances of entrepreneurs and inventors 
 from the colonial period through the early republic and even to the 
 Civil War. When Booker T. Washington argued for the primacy of economic 
 development over civil rights in his Atlanta Exposition speech, he was 
 assuming, not implausibly, that participation in the market would lead 
 to economic and eventual social power. What Washington failed to acknowledge 
 was the determined effort by southern governments to exclude blacks 
 from open market participation through legal segregation. His program 
 of economic progress, in exchange for a deferral of civil rights, was 
 therefore bound to fail. As Butler points out, no other ethnic group 
 was forced to take such an economic 00etour00as African Americans 
 were; as late as 1939, the U.S. Department of Commerce kept statistics 
 on two separate markets in the United States 00the African American 
 market and all others, lumped together as 00hite.00/font>
 
      What 
 this case study in the sociology of entrepreneurship shows is that entrepreneurship 
 cannot offer a road to emancipation when certain conditions are 
 not met, most notably the protection of the law, the impartial role 
 of government toward all market participants, and access to an open 
 market. 
 
   Muhammad Yunus, 
   00anker to the Poor,00and Women00 Emancipation through Entrepreneurship
 
  
 
Almost on the other side of 
 the globe, but in our own day, we encounter an example of entrepreneurship 
 that shows a clear path to emancipation: Muhammad Yunus, founder of 
 the Grameen Bank in Bangladesh, inventor of the micro-loan and of banking 
 without collateral. After studying economics on a Fulbright scholarship 
 in the United States, Yunus returned to Bengal in 1972, after the war 
 of separation from Pakistan had created the nation of Bangladesh. As 
 the head of the economics department at the University of Chittagong, 
 he noticed the poverty in the villages surrounding the university and 
 discovered that the most severe suffering occurred among women; even 
 when they worked from dawn to dusk, they could never get out of poverty. 
 Many were at the mercy of usurious money lenders, since the all-male 
 banking establishment would give them no credit. But the reality was 
 that most women needed just tiny loans, from 22 cents to 25 dollars, 
 to be able to buy supplies for the small businesses they conducted, 
 such as weaving bamboo stools. Yunus persuaded a bank to let him serve 
 as guarantor for a loan of $ 300. He parceled that money out in small 
 amounts and required tiny but frequent repayments, which were handled 
 by women in borrower groups that provided mutual encouragement and some 
 social control. No collateral was required, but the Grameen Bank, founded 
 in 1977 in a country where wealthy borrowers routinely fail to repay 
 their loans, has a repayment rate of over 98%, the highest of any bank 
 in the world. Most of its loans go to women (94% as of 1998); it has 
 trained tens of thousands of women to handle credit and has hired many  
 into the banking business (despite huge resistance from their conservative 
 relatives). It has become the model for a world-wide micro-credit movement 
 that stimulates small-scale self-employment. When Professor Yunus spoke 
 at Babson last year, he told us that in his patriarchal country, a man 
 with money in his pocket would always spend it on himself first (and 
 not always wisely). A woman would first spend it on her children, then 
 on the household, and on herself last of all. As a result, women presented 
 an excellent risk for banks, since their social behavior encouraged 
 responsible economic behavior. Women who borrowed money from the Grameen 
 Bank in their own name to support a small business venture gained power 
 in their family and community, were able to support education for the 
 next generation, and to model the entrepreneurial process. 
 
      In 
 his compelling autobiography, Banker to the Poor: Micro-Lending and 
 the Battle Against World Poverty (1999), Yunus talks about his initial 
 observations and experiments, and about how he and his co-workers learned 
 from their mistakes. With its pragmatic, unpretentious approach, 
 Banker to the Poor can serve as a blueprint for how entrepreneurship 
 can shape the future of the world; he does present it as a 00ualification 
 for the future.00He believes in self-reliance, local control, equal 
 opportunity, and accountability as the means to help people help themselves. 
 His ideas are rooted in close observation of real people, their humanity 
 and their habits, their prejudices and their potential. This close attention 
 to human nature and the specific habitat in which it unfolds itself 
 differentiates his ideas from anything resembling an ideology. There 
 is an emphasis on the imagination and on learning from experience that 
 keeps this body of thought from becoming a closed, self-referential 
 system. 
 
III. Enlightenment 
 and Entrepreneurship 
 
These are, of course, central 
 ideas of the transatlantic Enlightenment of the 17th and 
 18th centuries, which was also profoundly anti-ideological 
 in its insistence on experimentation, observation, and evidence. To 
 see them re-applied in an economic movement of world-historical significance 
 confirms the obvious: so far from being outdated, the Enlightenment 
 still gives us the best direction for a decent future. The present-day 
 discourse about entrepreneurship gives us a chance to revisit, after 
 a detour of two centuries, the Enlightenment00 promise of economic 
 self-realization.
 
      Just 
 to refresh your memory, here are some of the other key ideas we associate 
 with the Enlightenment:
 
 
   a 00elief in natural 
   law and universal order00
   00onfidence in 
   human reason00
   a 00/font>rational and scientific 
   approach to religious, social, political, and economic issues00
   a 00/font>general sense of progress 
   and perfectibility00
   a 
   belief in a global humanity and an aversion to blind nationalism.
 
 
 
Leading Enlightenment 
 thinkers 00ought to discover and to act upon universally valid principles 
 governing humanity, nature, and society. They variously attacked spiritual 
 and scientific authority, dogmatism, intolerance, censorship, and economic 
 and social restraints00(all quotations from the online Columbia 
 Encyclopedia).
 
      Among 
 the lasting results of the Enlightenment are our modern science and 
 technology; our notion of individual human rights and the rule of law; 
 the modern skepticism towards established religions and all traditions 
 not based on reason; and new theories of psychology and education that 
 emphasize the ability of each individual to grow and change.
 
      But 
 let us now turn to Adam Smith and Benjamin Franklin, the two 18th 
 century Enlightenment figures I want to discuss today. They had quite 
 a few things in common. They died in the same year (1790); both published 
 important texts in the same year (1776): Smith, the Wealth of Nations 
 and Franklin, with his co-author Thomas Jefferson, the Declaration 
 of Independence. Both were charming, sociable, and gifted at winning 
 people00 trust. They met once, during Franklin00 tour of Scotland 
 in 1759. Then in his early fifties, Franklin was already a world-famous 
 scientist, a Fellow of the Royal Society, and a recipient of honorary 
 degrees from major European and American universities. Smith, then in 
 his mid-thirties, had been appointed to a professorship at the University 
 of Glasgow at age 28, currently held the chair in moral philosophy, 
 and was the author of The Theory of Moral Sentiments, published 
 in the very year the two men met, 1759. Both had benefited from patronage; 
 both were philanthropists who gave much or most of their money away. 
 Both were to become hugely influential in their lifetime and to become 
 mythological figures after their death.
 
      Although 
 Franklin was the older of the two, let me start with Smith, since he 
 is the one who popularized the concept of the 00ommercial society00
 that helps us understand Franklin (and, for that matter, Equiano) and 
 is also the one whose most famous work is as widely unread and misunderstood 
 as it is referred to.  It helps to remember that, although he wrote 
 the most influential book on economics, Smith was primarily a moral 
 philosopher, who was interested in institutions that might help with 
 the project of moral perfection. Jerry Muller, in his wonderful book 
 Adam Smith in His Time and Ours 
 (1993), describes Smith00 project as follows:
 
As a moral philosopher, 
 Smith was concerned about the nature of moral excellence. But like many 
 other Enlightenment intellectuals, he tried to begin by describing man 
 as he really is. His conception of man was not as an intrinsically 
 good creature corrupted by society, nor as an irredeemably evil creature 
 except for the grace of God. His project was to take man as he is and 
 to make him more like what he is capable of becoming, not by exerting 
 government power and not primarily by preaching, but by discovering 
 the institutions that make men tolerably decent and may make them more 
 so. (Muller 48)
 
One of these institutions is 
 the market which, so far from being the place of 00aissez faire00
 (a term never used by Smith), is a place that needs to be regulated 
 for the common good and that inculcates such human qualities as self-control, 
 prudence, honesty, and fairness. In a society of increasing interdependence 
 through market relations, says Smith, 00very man 00lives by exchanging, 
 or becomes in some measure a merchant, and the society itself grows 
 to be what is properly a commercial society00(from Muller 70). In 
 fact, our capacity for exchanging the fruits of our labor in the pursuit 
 of self-interest gives us a 00pecifically human dignity00(Muller 
 70); it encourages improvement, making good use of our different levels 
 of talent, and it fosters peaceful interdependence. Knowing what he 
 does about human nature, however, Smith cautions against relying on 
 altruism and advises us to acknowledge that each of us acts from self-interest. 
 The one quotation from Wealth of Nations that everybody remembers 
 is this:
 
It is not from the benevolence 
 of the butcher, the brewer, or the baker, that we expect our dinner,  
 but from their regard to their own interest 00Nobody but a beggar 
 chuses to depend chiefly upon the benevolence of his fellow-citizens. 
 (Wealth of Nations, Book I, Chapter 1, 00f the Principle which 
 gives Occasion to the Division of Labour,00I.2.2)
 
Here is also the cue for understanding 
 self-interest not as blind, but as enlightened self-interest: 
 00obody but a beggar,00says Smith, relies on other people00 benevolence. 
 By legitimizing self-interest, Smith un-stigmatizes the merchant and 
 recognizes the value of labor. Commercial interdependence, which can 
 channel self-interest toward a common good through clearly understood 
 norms of behavior, provides more opportunity for human agency and dignity 
 than older, inflexible and often arbitrary forms of dependence -- of 
 serf on lord, of servant on master, and so forth; it puts contractual 
 relations in place of personal dependence. Government has a role in 
 regulating commercial society, first and foremost by abolishing the 
 privileges granted to special interest groups and powerful monopolies. 
 Only a truly free market can create the opportunities and the civilizing 
 effects that Smith associates with it. But government must do more: 
 it must provide broad opportunities for education, so that the blessings 
 of commercial society can be extended to all who wish to participate, 
 and it must help with providing an infrastructure that enables commerce: 
 not only roads and harbors (in Smith00 day), but also reasonable and 
 enforceable laws that encourage fair exchange and prevent abuse.
 
      One 
 of the ways, then, in which the market contributes to individual and 
 social betterment, as Muller points out, is by 00i>[disciplining] 
 society00(133): 00mith valued the market most because it promoted 
 the development of cooperative modes of behavior and because it made 
 men more self-controlled and more likely to subordinate their asocial 
 passions to the needs of others00(Muller 94); his 00orks articulate 
 a vision of 00ommercial humanism.0004 Commercial society does not liberate 
 the passions in a helter-skelter free-for-all but tames them. Smith00 
 famous contemporary Edmund Burke wrote:
 
Society cannot exist unless 
 a controlling power upon will and appetite be placed somewhere, and 
 the less of it there is within, the more there must be without. It is 
 ordained in the eternal constitution of things, that men of intemperate 
 minds cannot be free. Their passions forge their fetters. (From Muller 
 99) 
 
To paraphrase a famous contemporary 
 of ours: 00t00 the morals, stupid!00/font>5  
 
      And 
 yet commercial society is not just, or even primarily, about constraining 
 the passions; it is also about liberation and newness and celebration 
 00even a celebration of economics as the art of living. 
 
      Sound 
 like a fairly tale?
 
      Here 
 goes. Once upon a time (about a century and a half ago) and once upon 
 a place (more than 3,000 miles from here), there lived a man who, by 
 the standards of his day and by the standards of most people today, 
 was not a success. He came from a pretty good family, lived in a pretty 
 good town, went to a pretty good local college (Harvard), but he never 
 worked in the profession for which he was trained, he was unsuccessful 
 as a businessman, he wrote books that didn00 sell, he never married, 
 and he died of tuberculosis at age 44, as poor as he had lived. The 
 one book for which he is mostly known today begins with a chapter called 
 00conomy00and goes on to show, over many pages, how little it takes 
 to feed the body and how much it takes to feed the soul. 
 
      I 
 am, of course, talking about Henry David Thoreau from Concord, Massachusetts, 
 whose book Walden, published in 1854, addresses the relationship 
 between making a living, and making a life. 00e are often reminded,00
 he writes in the Conclusion to Walden, 00hat if there were 
 bestowed on us the wealth of Croesus, our aims must still be the same, 
 and our means essentially the same.00Croesus, as you may recall, was 
 the famously rich King of Lydia, who lived in the sixth century B.C. 
 Let me repeat Thoreau00 line: 00f there were bestowed on us the 
 wealth of Croesus, our aims must still be the same, and our means essentially 
 the same.00He could have stated this as a caution for entrepreneurs: 
 individual wealth-creation is just the beginning of the journey. But 
 it can be an inspiring and ennobling, not a demeaning, journey.
 
      In 
 a 1912 lecture at Brown University entitled 00usiness - A Profession,00
 Louis D. Brandeis (later known as Justice Brandeis and the man after 
 whom Brandeis University is named) said, 00eal success in business 
 is to be found in achievements comparable ... with those of the artist 
 or scientist, of the inventor or the statesman. And the joys sought 
 in the profession of business must be like their joys ...00-- the 
 same joys, I suspect,  that Henry David Thoreau had in mind when 
 he wrote about commerce as an example of creation and self-creation, 
 an antidote to passivity and fear. 00very path but your own is the 
 path of fate,00he says and praises commerce for 00ts enterprise 
 and bravery00 00t does not clasp its hands and pray to Jupiter,00
 but it is 00onfident and serene, alert, adventurous, and unwearied.00
 Notice his use of the term 00lert,00Israel Kirzner00 chief attribute 
 of the entrepreneur. Human beings, in Thoreau00 words, need 00o 
 live deliberately, to front ... the essential facts of life,00to know 
 themselves, to be what he calls 00wake.00In one of his most-quoted 
 lines at the end of Walden, he reminds us: 00nly that day dawns 
 to which we are awake.00Only that opportunity arises to which we are 
 alert. 
 
      Like 
 Adam Smith, Benjamin Franklin has come down to us in many voices, not 
 all of them his own: taken as the prophet of the self-made man, he was 
 made a co-inventor of the American myth of opportunity (I was tickled 
 to learn from Gordon Wood00 recent study, The Americanization of 
 Benjamin Franklin, 00hat the book Davy Crockett had with him when 
 he died at the Alamo was not the Bible but Franklin00 Autobiography00
 [Wood 3]). For Max Weber, in The Protestant Ethic and the Spirit 
 of Capitalism (1905), Franklin became 00 perfect exemplar of the 
 modern capitalistic spirit00(Wood 7). Just this year, to commemorate 
 the 300th anniversary of Franklin00 birth, Entrepreneur 
 Press in California published a book entitled Ben Franklin: America00 
 Original Entrepreneur, which is rendering of Franklin00 autobiography 
 rewritten by one Blaine McCormick in 21st century English, 
 with such chapter headings as 00 Strategic Response to a Competitive 
 Betrayal00(Chapter 30), 00ranchising Across the Continent00(Chapter 
 42), and 00he Power of Contingent Contracts00(Chapter 59).
 
      Franklin 
 certainly was a self-made man, one who not only created his own 
 fortune but also his own public image. He cultivated many of the qualities 
 that make for commercial success, such as prudence and temperance, reliability 
 and regularity, and he learned to govern a young person00 desire for 
 instant gratification. His most lucrative project during his days as 
 a printer and bookseller was an annual publication that he continued 
 for over 20 years, Poor Richard00 Almanac, 
 full of advice on all sorts of things, not least on how to succeed through 
 good personal habits. In compendium form, entitled The Way to Wealth, 
 Franklin00 folksy sayings and proverbs attained classic status.
 
      He 
 was an immensely curious man, who always wanted to know how everything 
 worked and how the phenomena of the world were connected. He was also 
 immensely pragmatic 00for instance, he supported all churches in Philadelphia 
 while attending none, holding (like Smith) that religion was useful 
 as a social institution and that competition among denominations, or 
 religious pluralism, was a check on theocratic tendencies. He distrusted 
 altruism and thought that appealing to people00 self-interest was 
 the best way to make them see the common good. He was a passionate autodidact, 
 with only two years of formal schooling and a distrust of useless learning 
 divorced from reality (again, like Smith, who thought that his professors 
 at Oxford wasted his time as well as theirs). As an entrepreneur, Franklin 
 helped to implement a form of networking (beginning with his famous 
 Junto) that could replace patronage by social superiors; as a social 
 entrepreneur, he was a tireless initiator of civic and commercial institutions 
 (a lending library, a college, a fire department, fire insurance, etc.) 
 that combined benefits for individual participants with benefits for 
 the common good. Besides his scientific and technological inventions 
 and innovations (most famously, the Franklin stove and the lightning 
 rod, for both of which he declined patents), he came up with commercial 
 innovations such as franchising. While he became one of the richest 
 men in North America, who could afford to retire at age 42 to lead the 
 life of a gentleman interested in 00atural philosophy00and public 
 service (he had a portrait painted, acquired a coat of arms, etc.), 
 he repeatedly extended his own capital for public purposes. At the end 
 of his life, he threw in his lot with the new nation of shopkeepers 
 and artisans, disgusted with the society of gentlemen he had cultivated 
 during his years in England. Franklin re-invented himself not once, 
 but multiple times. For our purpose, it is easy to claim him as the 
 archetypal entrepreneur as well as a model of creative, innovative, 
 entrepreneurial thinking.
 
      And 
 yet it is as an Enlightenment figure, in company with Adam Smith, that 
 he is most inspiring, because he helps us expand our conception of entrepreneurship 
 as a 00ualification for the future00not just for individuals but 
 for the world. Franklin the Enlightenment figure was a person who never 
 stopped trying to understand the world around him, and who never stopped 
 trying to improve himself and others. His autobiography, which was never 
 completed and remained unpublished during his lifetime but portions 
 of which circulated in manuscript, introduces the trope of life as a 
 book, in which one00 mistakes appear as printer00 errors, or 00rrata00 
 00ere it offer00 to my Choice,00Franklin writes, 00 should have 
 no Objection to a Repetition of the same Life from its Beginning, only 
 asking the Advantage Authors have in a second Edition to correct some 
 Faults of the first00(Franklin 1). Perhaps the most famous part of 
 the autobiography is Franklin00 project of attaining moral perfection. 
 To accomplish this, he identified 13 virtues that seemed to him most 
 important, as well as a checklist that allowed him to trace his own 
 progress during any given week. Here is the list:
 
   Temperance: 
   Eat not to dullness; drink not to elevation.
   Silence: 
   Speak not but what may benefit others or yourself; avoid trifling conversation.
   Order: Let 
   all your things have their places; let each part of your business have 
   its time.
   Resolution: 
   Resolve to perform what you ought; perform without fail what you resolve.
   Frugality: 
   Make no expense but to do good to others or yourself; i.e., waste nothing.
   Industry: 
   Lose no time; be always employed in something useful; cut off all unnecessary 
   actions.
   Sincerity: 
   Use no hurtful deceit; think innocently and justly, and, if you speak, 
   speak accordingly.
   Justice: 
   Wrong none by doing injuries, or omitting the benefits that are your 
   duty.
   Moderation: 
   Avoid extremes; forbear resenting injuries so much as you think they 
   deserve.
   Cleanliness: 
   Tolerate no uncleanliness in body, clothes, or habitation.
   Tranquility: 
   Be not disturbed at trifles, or at accidents common or unavoidable.
   Chastity: 
   Rarely use venery but for health or offspring, never to dullness, weakness, 
   or the injury of your own or another's peace or reputation.
   Humility: 
   Imitate Jesus and Socrates.
 
  
 
      In 
 his discussion of these virtues, Franklin makes it clear that he considers 
 them, and goodness in general, as pragmatic (not socially prescribed 
 or transcendentally ordained): it is simply in our self-interest to 
 be good. (For his newspaper, the Pennsylvania Gazette, he once 
 published a Socratic dialogue to prove 00hat a vicious Man could not 
 properly be called a Man of Sense00[Franklin 80]). 
 
      But 
 we need to go back to 00mancipation.00To emancipate ourselves from 
 the accidental circumstances life has handed us and to become the person 
 we desire to be, we must reason, we must learn, we must act, we must 
 view the world in terms of opportunity. We must practice 00ntrepreneurial 
 thinking.00It implies a readiness to take the initiative, to investigate 
 innovation, to test tradition, with full awareness of possible consequences. 
 In business as in life, it downplays constraints and highlights possibility. 
 In philosophical terms, this implies a quasi-existentialist, anti-determinist 
 stance that stresses free will and free choice. In Sartre00 book 
 Being and Nothingness (1942), there is even a concept called 00ad 
 faith,00by which Sartre means the refusal to accept personal agency, 
 and therefore to accept responsibility for one00 state or condition. 
 
      For 
 Franklin and his contemporaries the question was: how can I overcome 
 constraining circumstances, how can I take advantage of opportunity, 
 without taking advantage of others? How can I do well and do good at 
 the same time? For the academic discipline of entrepreneurship today, 
 as for all of us who think about entrepreneurship as a new beginning, 
 the intellectual challenge is: how can we develop a new social 
 philosophy that is compatible with entrepreneurship as a new business 
 paradigm? Muhammad Yunus says: everyone can be an entrepreneur. Whether 
 or not that is realistic, the question is: what would a world be like 
 in which entrepreneurship is triumphant? 
 
      We 
 can go to Franklin for cues. There is a letter to Franklin that is inserted 
 in the printed editions of his autobiography between the first and second 
 part (which were undertaken 13 years apart). His correspondent Benjamin 
 Vaughan, who had seen a copy of Part One, encouraged Franklin to continue 
 the work, so as to give an example to young people from all kinds of 
 origins. Vaughan suggests that it is absolutely crucial to demonstrate 
 that one can be both successful and ethical: 00or the moment that 
 all men, without exception, shall be conceived abandoned, good people 
 will cease efforts deemed to be hopeless, and perhaps think of taking 
 their share in the scramble of life, or at least of making it comfortable 
 principally for themselves00(Franklin 62). Economic 
 individualism is a dead end. Investing in our own life alone is 
 meaningless unless we also invest in the lives of others. Our own wealth 
 creation must lead to the creation of wealth for all. Adam Smith meant 
 this when he spoke of the 00ealth of nations.00/font> 
 
 
IV. Educating 
 for Enlightened Responsibility: Entrepreneurial Learning and Social 
 Entrepreneurship in a Globalized World 
 
The 00ealth of nations00
 is alluded to in another book that most of you in this audience know: 
 Reichtum von unten, or 00ealth from below,00by G眉nter Faltin 
 and J眉rgen Zimmer. A 00idden gem00is how Babson College has been 
 repeatedly rated by the Wall Street Journal, and a 00idden 
 gem00is what I would call this book. It is a truly visionary look 
 at the future, based on an incisive analysis of the present. I first 
 read the book over a decade ago, and I just reread it for this talk. 
 I am amazed and impressed by the freshness of this work 0000resh00
 in the double sense it has in English: 00nnovative00or 00ew00
 as well as German 00rech,00provocative. Its radical prescription 
 for the malaise of Europe00 late industrial economies lies in the 
 tradition of Smith and Franklin: let everyone have a chance; don00 
 feel sorry for yourself but roll up your sleeves and think for yourself; 
 throw out old systems that have gone to rot, first and foremost the 
 educational systems you are so fond of; create a culture of entrepreneurship 
 and entrepreneurial thinking; take more responsibility for your own 
 life; be alert; have courage. And although entrepreneurship is all about 
 the creation of opportunity and wealth, Faltin and Zimmer also fall 
 in the tradition of Transcendentalists like Henry David Thoreau, by 
 advocating an anti-materialist message they call 00ntelligent asceticism.00
 Entrepreneurship is not about acquiring more things; to the extent it 
 is about individual opportunity, it00 primarily about personal growth 
 and independence. 00apere aude.00
 
      I 
 would like to end this paper with two additional suggestions for how 
 we might think about a more comprehensive 00hilosophy of entrepreneurship.00
 
      First, 
 I would like to draw your attention to the concept of philanthropy, 
 which literally means 00ove of man00or 00ove of humanity.00It 
 used to mean something like charity, giving of your own wealth to the 
 less fortunate, or to some public purpose. In recent years, it has begun 
 to be renamed in the academic discourse (at least in the US, where it 
 is an academic subject in which you can get a Ph.D.) as 00ocial entrepreneurship,00
 which I think is a promising development. The Third Sector, as Americans 
 call it, the not-for-profit sector, is a source of much entrepreneurial 
 action, with many good results. Many institutions in the United States 
 are not-for-profits, including my own college, but also places like 
 Harvard, Yale and Princeton. The richest entrepreneur alive today, Bill 
 Gates, has decided to give most of his money away; his foundation just 
 received a $ 32 billion pledge from Warren Buffet, one of the world00 
 most successful investors. Although social entrepreneurship can never 
 replace the role of governments in addressing the world00 social needs, 
 it is an important complement and often does things governments cannot 
 do. 
 
      Secondly, 
 we need to spend some more time thinking through the implications of 
 globalization, which Germans generally perceive as a threat, and how 
 it connects with entrepreneurship. 
 
      The 
 most advanced entrepreneurship educators define entrepreneurship as 
 a set of ideas and skills that liberate human potential, that encourage 
 imagination and initiative to create personal and social wealth. The 
 underlying philosophy, which I have tried to place in the tradition 
 of the Enlightenment this evening, is universally applicable and not 
 limited to a particular nation or culture. Where elements of entrepreneurship 
 have been employed thoughtfully in Third World countries like Bangladesh, 
 they have supported local economies and positive social development. 
 These forms of entrepreneurship can be seen as a corrective to those 
 forces of globalization that are represented by multinational corporations 
 with weak connections to local communities. Large thinking about entrepreneurship 
 needs to consider its global dimensions, real and potential. Large thinking 
 about globalization needs to consider the power of entrepreneurship, 
 real and potential, among its concepts. 00hink globally, act locally.00
 And always, have courage.  
 
Works Cited 
 
 
Bitros, George C., and Anastassios 
 D. Karyannis. 00he liberating power of
 
entrepreneurship in ancient 
 Athens.00