Baumol’s “Entrepreneurship: Productive, Unproductive, and Destructive”

Posted on October 14, 2010

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Came across a very good journal article today for those interested in the evolution of entrepreneurship – William Baumol’s “Entrepreneurship: Productive, Unproductive, and Destructive.” Published back in 1990, it’s an interesting read given the current unemployment levels and post-housing bust economic doldrums we’re experiencing.

Baumol write that “…at time the entrepreneur may even lead a parasitical existence that is actually damaging to the economy.”  Gasp! Especially for someone based in the heart of Silicon Valley.  His main point is that entrepreneurial activity strictly focused on rent-seeking activities is, in fact, a negative drag on economic growth.  Baumol succinctly walks through a number of history’s civilizations to highlight this point.

Non-technical and well-written.