Economics For Entrepreneurs
CJay Engel on the Entrepreneurial Life
The entrepreneurial life is good for the individual, the family, society and civilization. Whether your entrepreneurial undertaking is something small or something huge, or somewhere in between, doing something entrepreneurial, utilizing your own resources, benefits others and is therefore heroic.
Successful entrepreneurs should not be called upon to “give back” to society. The entrepreneurs’ role itself is socially beneficial. They make money by producing goods and services that consumers value more than the money they pay to acquire them. Society — in the form of the market — has its own feedback loop to tell the entrepreneur whether or not value is being created for others: profit is the signal that society is experiencing value, and loss is the signal that the entrepreneur got it wrong and is not creating value. There is no need for a bureaucrat to tell us.
But you don’t need a social purpose or a change-the-world idea, or even a monetary goal to be an entrepreneur. Just get started. C Jay Engel started straight out of school. Entrepreneurship was stability; bread and butter. He had skills in project management and found that people needed those skills, and he developed a consulting business. He was able to try to expand in other areas, which took him into technology; successes and failures were part of the recipe, as was fun. He enjoyed himself and was able to develop as a person.
The pursuit of higher values can come later, when your entrepreneurial business matures and stabilizes. Initially, C Jay focused on what was immediately in front of him. Plans shift quickly and new directions open up, and agility is required. You can’t plan your entire entrepreneurial life at the outset. Now — still in his thirties — he is able to reflect on what he calls “grander things”, like the legacy he will leave to his kids. Not the financial one, but the kind of world he can contribute to, that they will live in. He likes to think that there are hundreds and thousands of entrepreneurs all over the world doing the same thing to help bring about that good world. It’s an exciting and inspiring spontaneous order: entrepreneurs making a better world by helping individuals.
Is entrepreneurship especially arduous? It can be. Think of Elon Musk. The task of getting people to Mars to establish a colony is pretty arduous. It’s less so if you’re setting up a consulting shop. But there is uncertainty to grapple with, and doing so requires a certain mindset. It’s a learning process, and trying different ways to handle uncertainty in the multiple different ways you’ll encounter it makes you a better, more developed person. Constant self-awareness helps you realize what you need to do to handle conditions of uncertainty.
Does that mean that a special set of personal attributes is required to be an entrepreneur? Is there a personality test? We’ve had a number of guests talk about elements of entrepreneurship, like a bias for action, risk mitigation, and brutal determination. But these are patterns of behavior more than they are personality traits. C Jay’s advice is: just do it. Examine yourself along the way and you’ll find out your strengths. And when you find that there are places where you can strengthen yourself (or your team), that’s what other people are for. You can’t be highly successful without engaging other people, so focus on that rather than on any so-called “weaknesses” you may be told you have.
Technology helps you assemble not only your team, but also a full set of entrepreneurial resources. The entrepreneurial economy is highly collaborative. Whether it is Upwork or LinkedIn or Alibaba or Amazon, technology can help you assemble a team, a full set of resources and a supply chain. You can find marketers and accountants and engineers and interconnect them all over the globe or locally, in a team. Team building and team motivation are core skills (and can be a limiting factor). Self-reliance does not mean the same thing as it did in the past. The rugged individual is not the driver of the market economy. In fact, the entrepreneurial economy is highly collaborative — self-supporting rather than self-reliant. Any capital you acquire depends on the entrepreneurs in the earlier stage who produced it for you, in anticipation of your needs. Price signals from other entrepreneurs guide you. No entrepreneur is alone. The invisible hand is actually visible — it’s the price mechanism connecting you to all the people and all the resources in the world.
How do we communicate this narrative to the world? The socialists are better at marketing than the entrepreneurs. Such harsh words are used about profit, and yet it is the social signal of approval. People who are benefiting from capitalism, like Hollywood celebrities and Silicon Valley billionaires, do not understand capitalism and decry it. What should entrepreneurs do? Just keep working at entrepreneurship. Keep making life better for customers and everyone else. It’s also healthy to reflect on how you are benefiting people around you. If you have a chance to say something or write something and share an idea then take it. Doing so is itself an act of entrepreneurship. Our message will emerge from the communication efforts of individuals.
C Jay Engel himself has started Austro Libertarian magazine. It’s a new publication located somewhere between the academic rigor of QJAE and the shorter articles of Mises Daily. Original content in longer form articles, in your choice of digital or a beautifully designed and printed physical magazine. For C Jay, starting a magazine is another example of economic action rather than political action.