Article Summary: Entrepreneurship in American History

Gordon, J. (2014). Entrepreneurship in American History. Retrieved from https://imprimis.hillsdale.edu/entrepreneurship-in-american-history/

The article begins by defining the term "entrepreneur" as someone who carries out, manages and takes on the risk of venturing into a new business. From the word entrepreneur comes another term, "entrepreneurship', which this article refers to as the activity of an entrepreneur that encompasses the tasks above. In the US, the act of entrepreneurship traces its origin in 1607, when the Virginia Company, a joint-stock enterprise, began a new plantations business hoping that it would yield profits. At that time, stock trading was a new invention where a company would limit its liability to allow people to invest in it without facing the risk of losing their shares if the business failed. Besides, this stock business provided a platform for prospective entrepreneurs to invest some of their resources in a publicly-traded company where the chances of failure were lower.

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However, the inexperience of Virginia Company in the plantations business meant that its shareholders had to climb a sharp learning curve to hone their entrepreneurship skills. With that in mind, the author acknowledges that Virginia Company struggled with numerous mistakes as it ascended this curve. Attempts to look for gold in Virginia, create a glass-making industry and convert Jamestown into a company town all failed. There was a renewed of hope, albeit too late, with the introduction of West Indian Tobacco that created an export market for Virginia in Europe.

On a slightly different note, the article mentions some American colonies such as Virginia, Plymouth and Massachusetts Bay that were established by commercial organizations. Other colonies such as Maryland and Pennsylvania were founded by property owners. Most of these founding organizations had non-entrepreneurial interests in the colonies but rather provided shelter for religious renegades. There was, however, an entrepreneurial interest in Manhattan where the Dutch founders were so adamant in making profits that they never constructed a church for 17years. Even today, Manhattan lies at the heart of New York, which is one of the most business-oriented and powerful cities worldwide.

One colony that had an intriguing entrepreneurial culture was New England, which was ruled by priests. The article recognizes a strong spirit of entrepreneurship in this colony. Regardless of this willpower, the adverse soil conditions in New Zealand could not support cash crop farming and, thus, substituted commercial agriculture with fishing. However, the colony was able to diversify its revenue sources to a greater extent compared to other Southern colonies. These sources included fishing, shipbuilding and shipping. Additionally, the presence of iron ore deposits within New England substantially boosted its economic power. John Winthrop saw the business opportunity in extracting iron to make products that could be sold in America and Europe. Therefore, being an entrepreneur, he almost immediately seized this opportunity by establishing a firm called the Company of "Undertakers", a word that represents the literal meaning of an entrepreneur.

In a recap of the history of the relationship between the government and industries, the author goes back to the inception of the Company of Undertakers, which was granted a 21-year control of the iron industry, full rights over the exportation of iron and a tax exemption by the government of Massachusetts. However, due to some financial constraints, this company, which was later renamed the Saugus Iron Works, failed terribly and has seen been converted into a historical site.

The proliferation of the American economy is largely attributed to the Yankee ingenuity. By the time the American colonies gained independence, they had already become the wealthiest territories globally. It was during this period that Adam Smith published the book "The Wealth of Nations", which became the basis of the Smithian classic that underpins America's economic approach.

On another note, this article identifies the freedom to take risk and the freedom to fail as two key impetuses to entrepreneurship. The author uses Frederic Tudor as an example to clarify the freedom to take risk. Tudor, one of America's earliest entrepreneurs, who started selling ice in 1806 and was already exporting about 2000 tons of ice annually by 1820. His ingenuity is noted in the way he integrated two cheap resources to create a valuable product, where he used sawdust, a free and locally available material, as an insulator for his ice. The author also identifies some entrepreneurs such as Henry Flagler, who was spurred by the freedom to fail to never give up until his businesses flourished. During the Civil War, Flagler ventured into the salt industry only for this business to collapse due to the fluctuating salt prices. He was forced to borrow a loan from his father-in-law to reinvest. Within five years, Flagler was among the founders of Standard Oil. Later on, he was able to transform Florida from a wasteland into an agricultural hub.

Conclusion

The article concludes by acknowledging the new crop of entrepreneurs that has risen in the digital era. Technology has created numerous niches for entrepreneurs to exploit shrewdly. As a result, this era boasts of having the greatest boom of profit-making since the onset of civilization. America provides opportunities for entrepreneurs to take risks with substantial resources available to actualize business ideas. The only challenge is that a government hell-bent on running the economy to benefit the ruling class will stifle the goose that has provided a good platform for entrepreneurs to prosper.

References

Gordon, J. (2014). Entrepreneurship in American History. Retrieved from https://imprimis.hillsdale.edu/entrepreneurship-in-american-history/