Entrepreneurship in American History

John Steele Gordon
Author, An Empire of Wealth: The Epic History of American Economic Power
–from the February 2014 issue of Imprimis (Hillsdale College)

The word “entrepreneur”—one who undertakes, manages, and assumes the risk of a new enterprise—comes from the French, where it literally means “undertaker.” The word was borrowed into English in the mid-19th century— perhaps the golden age
of the entrepreneur—when the number of new economic niches was exploding and the hand of government was at its lightest in history. The activity of entrepreneurship,
of course, is much older, going back to ancient times. As for America, our nation was
founded, quite literally, by entrepreneurs.

In 1607 the Virginia Company sent three ships across the Atlantic and unloaded 109 passengers at what became Jamestown, Virginia. They were embarked on a new business
enterprise that they hoped would be profitable—American plantations. The Virginia Company was a joint-stock company, a relatively new invention that allowed people to
invest in enterprises without running the risk of losing everything if the business did
not succeed. By limiting liability, corporations greatly increased the number of people
who could dare to become entrepreneurs by pooling their resources while avoiding the

possibility of ruin. Thus the corporation was one of the great inventions of the Renaissance, along with printing, double entry bookkeeping, and the full-rigged ship. Allowing incorporation as a matter of law, rather than requiring an act of the executive or of the legislature, began in the United States as early as 1811, when New York State passed a general incorporation law for certain businesses, including anchor makers—I suspect an anchor manufacturer had a friend in Albany. Soon enlarged in scope, the ability to incorporate simply by filling out the right forms freed the process from politics, and the
number of corporations exploded. There had been only seven companies incorporated
in British North America, but the state of Pennsylvania alone incorporated
more than 2,000 between 1800 and 1860. Unfortunately for the stockholders
of the Virginia Company, the business of American plantations was a very new
one and had a steep learning curve— a curve that would be encountered
again and again as the American economy developed and new industries
were born. It is a curve all would-be entrepreneurs must climb to be successful.
The Virginia Company did not climb that curve quickly enough, and made just about
every mistake that it could make: It tried to run Jamestown as a company town;
it searched for gold, of which Virginia has none, instead of planting crops; and
it failed at establishing a glass-making industry. Eventually Jamestown was
nearly abandoned . . .


About gabulmer

Christian apologist, husband, father, runner, blogger, leader with LIFE Leadership.
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