Entrepreneurship Is Social by Carl

¶ … Entrepreneurship is Social by Carl Schramm argues the point that the idea of "social entrepreneurship" is a distraction from the great work that normal entrepreneurs do. Stripped from the straw man framing, his point is that business does good things, and we should not lose sight of that. He spends a large portion of the article providing anecdotal and rhetorical evidence to support his claim. In particular, he takes umbrage with the idea that "social entrepreneurs" are improving health in developing countries. Taking umbrage with that really undermines his credibility as a human being, when the overarching point he is trying to make is actually valid.

Schramm spends two paragraphs describing the atrocity of American life in the middle of the 19th century -- the same quality of life as any other country at the time. He notes that life expectancies of the time were relatively short because of the hardships of life. He notes that advances in medicine have helped to improve the quality of life for Americans, but that part of the higher life expectancies can also be traced to increased consumption of higher-quality goods and services. Arguably, it is the higher quality part and not the increased consumption part that delivers the benefit. Entrepreneurs, he notes, are the ones who "invented and distributed these improved goods" and therefore "they deserve considerable credit for the rise in Americans' healthy and longevity." He neglects to provide evidence that entrepreneurs lack credit for their works, nor to realize that critical contributors like Louis Pasteur, Jonas Salk and Alexander Fleming were not entrepreneurs, as that would have disrupted the narrative.

His first citation is the development of the railroad. A few tribes might argue that this was not something that improved quality of life, but his point is that better transportation reduced vulnerability of the population to cyclical vagaries. This didn't really pan out in the 1930s, but in general being able to get food from multiple locations does help reduce malnutrition in a population. Over time, he notes, transportation networks allowed for businesses to grow to national scale. This allows them to be more efficient.

His second citation is Gustavus Swift, the Chicago meatpacking magnate who invented the refrigerated railway car. This development allowed people to increase their consumption of meat, dairy, fruits and vegetables, even in cities. This would have improved the nutritional content of American diets, and thereby contributed to longer lives. Swift made another contribution to longevity not mentioned in the article, when Upton Sinclair wrote an expose about the appalling lack of sanitation in Swift's Chicago meatpacking industry, leading to the creation of a federal regulatory body for food safety.

Railroads, it is noted, also allowed for other goods to be transported around the country. Schramm cites clothing as an example, but there are thousands of good examples. As companies had the ability to reach larger markets, they could invest more into their businesses. The result of those investments was a dramatic increase in the variety of goods available to the public, many of which contribute to better lives, if not longer. Advances in scale, Schramm notes, have resulted in the real cost of staple products being significantly lower today. He cites the Federal Reserve Bank of Dallas: "In 1919, an American had to work 10 hours to afford a basket of 12 food items. By 1997, the work time required to purchase their food basket had fallen to two hours."

Schramm mentions at this point that there have been other contributions, in both science and in the development of public service to protect things like water supply, that have also contributed to increased health and longevity. He feels that entrepreneurs should be on that last as well. To be fair, they usually are, even if specific ones have slipped from public consciousness.

Schramm notes some modern-day entrepreneurs such as Bill Gates for his work on improving communication Thus, by creating value to society that they do not hoard all to themselves, entrepreneurs are social entrepreneurs. He further makes the point that cell phones have revolutionize communications in the developing world -- a valid point -- and that this has given rise to new business models and innovations, and created opportunities for work that will life more people out of poverty.