Dis-Incentivizing Entrepreneurship Cannot Improve The Economy.

The full potential of the market process can only be achieved by true and active entrepreneurship.

Corporate decision-makers – managers – act as true entrepreneurs only to the extent that the entrepreneurial opportunities detected translate into personal benefit. Without this type of arrangement the full potential of the market process is wasted, untapped because the entrepreneurial potential is limited.

How could it not be limited? It is the incentivized entrepreneur who will seek to know who to hire and it is the incentivized entrepreneur who will seek to know where to find the market information that reveals profit opportunities. Also, it is the entrepreneur who will leave if the firm undervalues his or her services.

If the management is entrepreneurial it experiences the same forces of competitive entrepreneurship as everyone else, which necessarily leads to accountability. When a corporation moves away from this ideal then a different structure appears. If the stockholders lack the effective power to fire management the corporation takes on a degree of monopoly structure due to the incumbency of the manager. The management lacks accountability and is sheltering itself from the competitive entrepreneurship inherent in the divine economy.

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