Wednesday, April 17, 2013

A Great Handicap of Economies Run by Political Authorities

From Thomas Sowell's "Basic Economics"(via WSJ):
James Cash Penney did not start with a lot of money. He was in fact raised in poverty and began his retail career as just a one-third partner in a store in a little town in Wyoming, at a time when Sears and Montgomery Ward were unchallenged giants of nationwide retailing. Yet his insights into the changing conditions of retailing eventually forced these giants into doing things his way, on pain of extinction. . . . In a later era, a clerk in a J.C. Penney JCP +5.56% store named Sam Walton would learn retailing from the ground up and then put his knowledge and insights to work in his own store, which would eventually expand to become the Wal-Mart WMT +0.27% chain, with sales larger than those of Sears and J.C. Penney combined. 
One of the great handicaps of economies run by political authorities, whether under medieval mercantilism or modern communism, is that insights which arise among the masses have no such powerful leverage as to force those in authority to change the way they do things.
One of the great tragedies of an educational system heavily influenced by government, such as the United States educational system, is that little is ever taught about great entrepreneurs who started with next to nothing and ended up creating great things. More than money it takes alertness and drive to carry out the vision that one is alert to, how often do students learn this in school?. Teachers from the college level on down are generally the least alert people on the planet, they have no understanding of the subject.

Most teachers started their careers after a life of formal education and nothing else. For them life is about scored tests, quizzes and exams, with the answers all known in advance. Real life is the opposite. It is about opportunities that are sometimes only seen by one individual. A central planning commission has no special talent to recognize such superior vision. Indeed, a central planning authority has no incentive to look for such talent and vision.

The world be a much better place if many more were taught about entrepreneurship. Most after graduation have no clue as to what it is or how to launch an entrepreneurial career.

1 comment:

  1. I feel the worst parts of the U.S. public school system are the failure to teach any form of critical thinking and sending kids out into the world without any marketable skills.