Abstract: The Entrepreneurial Culture and the Mysteries of Economic Development

Louis Galambos

Abstract

Culture is like fog. You know it is there because you can barely see the road ahead. But if you try to grasp it, you have a slightly damp but empty hand. My paper has that aspect of culture very much in mind and attempts to specify the illusive subject by linking it to entrepreneurship -- that is to specific efforts to combine land, labor, capital, and knowledge in the creation of economic activity that has some aspect of novelty. The entrepreneurship is important because of its central role in capitalism. The cultural dimension is important because it encourages individuals to take the risks of exploring possibilities for entrepreneurial ventures even though the most of them will be unsuccessful in the long-run. In search of the entrepreneurial culture in America around 1800, I look at immigration, agriculture, commerce, and the beginnings of the industrial revolution. The paper then jumps to the post-World War II era and examines the efforts of the World Bank to promote economic growth in those nations that had not experienced an industrial revolution and “modernization.”