The Switch From Latent To Active Entrepreneurship.

There are prominent leaders of thought in entrepreneurship that anchor the literature on the subject of entrepreneurship for those of us who recognize the essential role of human action in the economy. Two names that immediately come to the surface are Israel Kirzner and Joseph Schumpeter.

In a moment we will examine the difference between the viewpoints of these two individuals but first it is important to put everything into the context of natural law. Human beings share characteristics universally which is what distinguishes them from all other creatures. Alertness in a physical sense is not unique to humans. Most if not all animals are alert or else they will be eaten!

Yet alertness is the quality of an entrepreneur. So what is the alertness that is uniquely human? Alertness by the physical senses does not sufficiently distinguish humans so it must encompass more and even greater perception. Perception beyond the physical senses taps into the powers of the mind and the spirit. From this realization it can be stated that, in general, alertness in the entrepreneurial sense is related to the investigation of the truth.

Humans are social and so they benefit from the flow of knowledge that comes from social cooperation but there can also be barriers that form and so the entrepreneur distinguishes himself or herself by the independent investigation of the truth.

Whether this inherent entrepreneurial spirit manifests itself or not, it is always present – that is – it is either latent or active. For example, if there are certain taboos in society which creates barriers to the discovery of a better way of doing things most people will be latent rather than alert about that opportunity to make an improvement.

In this very interesting interview of Arielle John by Stephen Hicks two basic moments of entrepreneurship are identified. Arielle talks (@2:25) about the discovery moment given emphasis by Kirzner and the exploitive moment given emphasis by Schumpeter. My impression of the overview was that both moments were valued as part of a continuum which is very much in line with the viewpoint in the divine economy theory.

To this ‘timeline’ can be added the transition from latent to active entrepreneurship. It is a preparatory step which may be spontaneous or gradually developed and may or may not be consciously driven. It is like a seed germinating or a seedling unfolding to receive sunlight. It is a potential that is on the verge. This is when the latent entrepreneurial spirit transforms to an active state.

Will the newly activated “seeker after truth” immediately discover something? Perhaps not but the conditions are right for discovery?

Why the interest in going further back to the origins of entrepreneurship? Imagine the difference this would have on education and imagine the difference this empowering knowledge can have on individuals. Instead of a ‘class’ of entrepreneurs all humans are recognized as having the gift. Billions of entrepreneurs will move civilization along faster than only a select few!

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