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ENTREPRENEURIAL ECONOMICS
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Would you rather live in a world without blood transfusions or a world without maritime insurance? Blood transfusions are dramatic and memorable (which is why we see them on prime-time hospital shows), while the facilitation of commerce through risk sharing is routine and easily taken for granted. But I'd be willing to bet that by almost any measure, three centuries of organized insurance markets have contributed more to human happiness than three centuries of transfused blood.
Would you rather live in a world without personal computers or a world without junk bonds? It is both obvious and true that your computer runs wonderful software. It's less obvious but equally true that a lot of that soft- ware was developed only because some entrepreneur was able to finance a risky venture. The unprecedented prosperity of the past two decades is due partly to innovations in information technology and partly to innovations in the organization of financial markets. I don't know which has contributed more. (The question is very much complicated by the fact that each kind of innovation feeds off the other.) The obvious lower bounds offer no guidance: In the late 1980s, Microsoft's annual economic profit and Michael Milken's annual income were both in the same neighborhood at about $600 million.
Invention is the engine of prosperity, but inventions come in many forms. The internal combustion engine is an invention, and so is the system of just-in-time inventory management. Economists study the causes and effects of both. But nobody turns to economists to design a better car, so why should anybody turn to economists to design a better market?
Alexander Tabarrok - Personal Name
1st Edtion
NONE
ENTREPRENEURIAL ECONOMICS
Economics
English
Oxford University Press, Inc.
2002
USA
1-329
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