What is the difference between a political entrepreneur and a market entrepreneur
QUESTION 1.
For this week’s discussion board, read the following article from our weekly folder and answer the questions below:
1. What is the difference between a political entrepreneur and a market entrepreneur?
2. In what ways do government loans and subsidies hurt industries in the long-run?
3. What can governments do to help foster an entrepreneurial spirit and encourage a level playing-field for all?
2. REPLY TO SCOTT
Political entrepreneurs are those that seek and receive help from the government in ways such as federally guaranteed loans, subsidies, etc. They are basically companies on government welfare. These are companies that honestly believe that they need free money from someone else in order to make or develop their product. Market entrepreneurs are those that have made it on their own. They have developed a product and paid for it without handouts from the government.
Companies that request and receive government loans and subsidies get accustomed to receiving this “free” money and their requests seem to get larger and more costly to the government and it’s citizens. When they fall on hard times or need to build bigger and better, they expect the government to be there with an open pocket book. Because of this type of funding, some companies lose creativity and maybe even the drive to make it on their own. This can also create corruption within our political system with companies or individuals within companies operating underhandedly to obtain the most they can for their company or themselves. They create companies dependent on the government, almost like corporate welfare.
The government can create a level playing field within the corporate world by minimizing their loans and subsidies. This is easier said than done but corruption and bribes within our political system allow companies to gather funds and support than other companies cannot, simply because they have the right people and votes in their corner. The entire system must be overhauled and companies treated the same when requesting any type of funding. Funding in general should be reduced as a whole so that companies can be creative and find ways to create wealth in the private sector to fund their needs and not depend on the government. A good example in my eyes is the company that I work for, Ford Motor Company. When two of the Big Three Automakers looked for hand outs when times got tough, Ford found ways to trudge through the hard times by not holding out their hand to the federal government.
3.REPLY TO MELISSACOLLAPSE
- What is the difference between a political entrepreneur and a market entrepreneur?
A political entrepreneur receives money from the state/government entity and a market entrepreneur is successful on one’s own without any help from the state.
- In what ways do government loans and subsidies hurt industries in the long-run?
If there is no accountability for the money and how it is spent, one can doesn’t have an incentive or will to save since the money is being given, therefore many other useless or not as important items can be added. An example of this was the example of the steamships. Collins, the entrepreneur who utilized help with funding from the government spent the money on expensive items for his ships as he didn’t value the money as much whereas Vanderbilt was more careful about the building of the ships and as he had his own funding spent the money wisely and valued it more.
- What can governments do to help foster an entrepreneurial spirit and encourage a level playing-field for all?
The government should be able to offer assistance if one wants it, however, should hold the entrepreneur more accountable for what the money is for. Another suggestion is to not give all of the funds out at once, to do it in portions, also to encourage a segment of funding before granting more money.
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