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Fall 2018

ISSN 0890-913X

Volume 33, Number 3

Categories: Fall 2018 | Entrepreneurship | Capitalism

Desert, Entrepreneurship, and Crony Capitalism

Daniel Shapiro, West Virginia University

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TheJournalofPrivateEnterprise33(3),2018,63–74Desert,Entrepreneurship,andCronyCapitalismDanielShapiro�WestVirginiaUniversity______________________________________________________AbstractIarguethatinfreemarkets,profitsgainedandlossessufferedbyentrepreneursare,ingeneral,deserved,butthatthedegreeofprofitsgainedandlossessufferedisnotproportionaltothedegreetowhichentrepreneursdeservethem.Thisdiscrepancyappearstocreateaproblemwitharguingthatentrepreneurialprofitsandlossesaredeservedinafreemarket;nevertheless,afree-marketeconomyissuperiortooneofitsmainrelevantalternatives:cronycapitalism.Theconnectionbetweendesertandprofitsiscloserinfreemarketsthanincronycapitalism,andfreemarketsmakeiteasierforoutsiderstobecomeentrepreneursandthusbecomedeserving.______________________________________________________JELCodes:P16,P51,Y8Keywords:entrepreneurship,freemarkets,cronycapitalismI.IntroductionIprovidethreemainargumentsinthispaper.First,inafree-marketsystem,profitsgainedandlossessufferedbyentrepreneursare,ingeneral,deserved.However,second,thedegreeofprofitsgainedandlossessufferedisnotinproportiontothedegreetowhichentrepreneursdeservethem.Thisdiscrepancyappearstocreateaproblemwitharguingthatentrepreneurialprofitsandlossesaredeservedinafreemarket.Third,afree-marketeconomyisneverthelesssuperiortooneofitsmainrelevantalternatives:cronycapitalism.Cronycapitalismisasystemwhereinmanyentrepreneursmakeprofitstotheextentthattheyreceiveprotectionandprivilegefromasystemthatfavorspoliticallywell-connectedfirmsandmakesit�MythankstoRosolinoCandela,AndrewJ.Cohen,AlexanderCraig,RobertaHerzberg,StevenHorwitz,MarkLeBar,RossLevatter,andEricMackfortheirhelpfulcommentsonearlierdraftsofthispaper.ThispaperwasrevisedwhileIwasavisitingscholarattheF.A.HayekProgramforAdvancedStudyinPhilosophy,Politics,andEconomicsattheMercatusCenteratGeorgeMasonUniversity.Mythankstothecenterforprovidingsuchacongenialplacetowork.

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Metadata [hide]

Title	Desert, Entrepreneurship, and Crony Capitalism
Authors/Creators:	Daniel Shapiro, West Virginia University
Year:	2018
Volume:	33
Number:	3
Pages:	63 - 74
Publisher:	The Association of Private Enterprise Education
ISSN:	0890-913X
Document Type:	Articles
Keywords:	entrepreneurship, free markets, crony capitalism

Citation:
Shapiro, Daniel / 2018. "Desert, Entrepreneurship, and Crony Capitalism." The Journal of Private Enterprise, 33(3): 63-74.