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Capitalism and the Ivory Tower Intellectuals

This post is inspired by two articles published in the Financial Times by Luke Johnson, British serial entrepreneur and Chairman of Channel 4 and the Royal Society of Arts, in which he neatly summarizes the most basic challenge facing prosperous western countries in decline. The first is titled “Capitalism is still the best system there is”, the second “Choose enterprise over the ivory tower”. Both are behind paywalls (capitalism) but may be read free by registering (incentives). They need to be read in their entirety. Here are snippets:

Where do they think the money to pay for roads, schools, police and hospitals comes from? Do they believe that consumer innovation, technological advance and the funding for taxation emerge from the saintly public sector? Why is the profit motive seen as wicked, while working in places such as universities appears so very ethical?”

“Economic affairs are cyclical, but this generation is so prosperous that it finds the prospect of a long recession almost too much to bear. We are used to having a safe job, our own home or housing support, foreign holidays and all the rest. This munificence is only possible because free enterprise incentivises entrepreneurs to build companies… The brilliant anti-business intellectuals would solve our problems of unemployment, debt and stagnant wages by doing the opposite of the policies adopted by the world’s most buoyant economies. Meanwhile, leftwing economists suggest that the cure for government deficits is even more debt.”

“The reason academics understand entrepreneurs so poorly is that they lead lives so removed from those of most professors. There is an almost complete disconnect between the intellectual class and business founders. This alienation is a double tragedy. First, it means we don’t know enough about the psychology and character of wealth creators, which makes it harder to frame policy so as to foster more of them. Second, many of our brightest minds shun the world of start-ups, believing that they are more suited to the serenity of the university campus than the hustle of the market place.”