Following is the “white paper” essay of the lecture Social Entrepreneurship – An Objective Perspective, given at the University of Victoria and the University of Calgary in 2020, which can be viewed on YouTube at https://youtu.be/g987nJy_n7c.
Synopsis
Enterprises are traditionally defined as either for-profit businesses or non-profit organizations. The social enterprise is a new classification of enterprise that blends generating profits with complementary social benefits. However, even for-profit and non-profit enterprises provide substantial social benefits, which make this factor alone insufficient to differentiate social enterprises from them; demanding other issues be considered. Unfortunately social entrepreneurship is ambiguously defined even by universities who teach it and individuals who support it. Therefore, for the purposes of this essay, I define a social enterprise as an organization willing to forfeit profitability or competitive pricing to provide an additional social benefit complementing their primary product offering. The fundamental ethical assessment an entrepreneur must make is whether their motivations and aspirations for establishing a social enterprise are based on Individualism, which is the pursuit of one’s rational self-interest or Altruism, which is self-sacrificing. Establishing a social enterprise has both positive and negative practical consequences. On the positive side, an added social benefit can motivate an entrepreneur, investors and consumers, who equally share the same values, to support a social enterprise, thereby enhancing its value. If ill-considered there are also potentially negative consequences. For the entrepreneur, it can undermine both their incentive and their motivation for becoming an entrepreneur. For investors it can diminish profitability and their return on investment. For consumers it can result in higher prices. There are several more issues to consider as well. The entrepreneur, as a creative producer, must assess the degree to which the value propositions they bring to market are based on innovations related to their products or merely social benefits often unrelated to them. The entrepreneur must decide whether providing social benefits is most appropriately an individual decision, a corporate social responsibility or a requirement imposed by government. Seeking government support for social enterprises is as morally questionable as corporate cronyism as well as dangerous to long term financial sustainability. And finally social entrepreneurs who endorse Altruism can become victims of this sanction and give up the moral high ground they need to defend their right to establish an enterprise that serves their own rational self-interests.
Defining Social Entrepreneurship
Normally one associates entrepreneurs and entrepreneurship with companies established as for-profit enterprises. For-profit enterprises deliver products and services of value to consumers primarily for the purpose of maximizing profits. For these enterprises serving society is a means to an end, not an end in itself. This is in contrast to non-profit organizations that retain no profits and are formed primarily to serve some social or charitable purpose. However, in recent years a new classification of enterprise has emerged, the social enterprise, based on the concept of social entrepreneurship, which attempts to blend generating profits with providing additional social benefits as its primary goal.
“Traditional businesses just need to prove that they are financially sound, traditional charities need to prove that they are generating social impact – but social enterprises need to do both.”
Canadian Financial Post
Social entrepreneurs often state their reason for creating a social enterprise is to “have a positive impact” on the world. Considering that both for-profit businesses and non-profit organizations also strive to have a “positive impact” on the world this seems insufficient to differentiate social enterprises from them. And what constitutes a “positive impact” is also somewhat ambiguous. Who decides what constitutes a “positive impact” on the world, and why?
In 1994, John Elkington, a business management consultant and sustainability advocate coined the phrase “triple bottom line” (TBL). TBL measures a company’s success not simply by improving profits, but more broadly by improving the three P’s, namely “People, Planet and Profits”. A company’s success measured in profits is a relatively easy, objective accounting problem. Measuring a company’s success in regards to people and the planet is a highly subjective judgment. Still, this concept has found its way into many business school curricula. As of 2019 there were 23 universities in the United States offering majors in social entrepreneurship. This certainly is a departure from traditional business school education, and while still not dominant in many schools, it is a growing trend I hear about from students and professors.
While a successful entrepreneur and philanthropist Bill Gates invests in many social enterprises. His underlying motivation is represented by this quote from him.
“I believe that with great wealth comes great responsibility, a responsibility to give back to society and a responsibility to see that those resources are put to work in the best possible way to help those most in need. “
Bill Gates
Yet the Nobel laureate in economics Milton Friedman’s sentiments are on the opposite end of the spectrum as this quote from him suggests.
“There is one and only one social responsibility of business — to use its resources and engage in activities designed to increase its profits ……”
Milton Friedman
With various universities teaching opposing views on the purpose of business and such successful and prominent people as Bill Gates and Milton Friedman ascribing to such polar views, along with no precise definition of social entrepreneurship, it is no surprise entrepreneurs have a difficult time deciding whether a social enterprise is the best structure for achieving their desired purposes. Therefore, before I begin discussing the challenges and consequences of establishing a social enterprise and for the purposes of this chapter I provide my definition of it as follows.
A social enterprise is an organization willing to forfeit profitability or competitive pricing to provide additional social benefits complementing their primary product offering.
From this definition it is important to understand what forfeiting for something of value to oneself means, as distinguished from sacrificing something of value to oneself. Forfeiting for something of value to achieve something of greater value for oneself is commonplace. Entrepreneurs forfeit a great deal of time and money to establish their enterprises and produce products to generate profits. However, sacrificing something of value to oneself, such as sacrificing profits for a social benefit, with no expectation of gaining anything of equal or greater value in return is based on the entrepreneur’s ethics.
Business Ethics
Therefore the first question a social entrepreneur must consider when establishing their business is a business ethics question. A common thread, conceptually underpinning social entrepreneurship, not explicitly stated but often implied, is that the purpose of business is to serve society as its primary goal; and that success creates an obligation to give back to society. This is embodied in the ethics of Altruism, by Auguste Comte (1798-1857), which professes the sacrifice of one’s own interest to the benefit of others. Counter to this is the traditional view that the primary purpose of a business is to provide a livelihood for its owners and a return for investors, serving society as a means to that end, not the primary end itself. This concept is predicated on the premise of individual responsibility for one’s own life and livelihood. It is embodied in the ethics of Individualism espoused by Ayn Rand (1905-1982), which professes the pursuit of one’s own rational self-interest. Altruism professes the sacrifice of something of value to oneself as being virtuous and it attempts to claim the higher moral ground for doing so. Individualism professes productive achievement in the pursuit of one’s own rational self-interest, to obtain something of value to oneself as being virtuous.
I am not assuming the motivations of social entrepreneurs are necessarily altruistic and self-sacrificing. Some may have self-interested reasons to want to create the social benefits their social enterprises pursue. Then the social benefit they serve for those who value it as well is rightly viewed as a value added proposition complementing all the other values their products offer. This is rational and virtuous if based on Individualism, rational self-interest and productive achievement. However, those who do actually make sacrifices out of a sense of obligation to society and would prefer to do something else with their lives that would be more beneficial to them, but perhaps less beneficial to society, are being irrational, self-sacrificing and altruistic.
“If you exchange a penny for a dollar, it is not a sacrifice; if you exchange a dollar for a penny, it is. If you achieve the career you wanted, after years of struggle, it is not a sacrifice; if you then renounce it …. , it is.”
Ayn Rand
It is important to remember that for-profit and nonprofit enterprises all deliver social benefits as well. A for profit company that did not deliver products or services of value to society would fail, as consumers would no longer buy from it. Non-profit enterprises that did not satisfactorily serve their social causes would fail because contributors would cease to donate to them. In their efforts to deliver products and services or support a social cause neither for-profit nor nonprofit enterprises demand sacrifices. A for-profit company does not sacrifice profitability to provide an unrelated social benefit. A nonprofit organization does not sacrifice its social benefit for profitability.
As examples of companies providing social benefits yet producing substantial profits consider Walmart and Aldi. Walmart was founded by Sam Walton in 1962 and is an example of a for-profit company that has provided enormous benefit to society. It provides products at highly competitive prices making it easier for lower-income consumers to buy everything from beef to blankets to baseball bats. As John Tierney wrote “No institution or agency has done more to help the poor than Walmart.” By thus serving the poor (and everyone else) the Walton family has become the richest family in America with a net worth in excess of $190 billion. Similarly Aldi, a German company founded in 1948 by the Albrecht brothers entered the U.S. market in 1976. It sells groceries at low prices and has earned the description “the poor man’s Whole Foods.” The Albrecht family has a net worth of $53 billion.
“It is not from the benevolence of the butcher, the brewer or the baker that we expect our dinner, but from their regard to their own interest.”
Adam Smith
What businesses like Walmart and Aldi provide are examples of how the “butcher, the brewer or the baker”, and countless others like them, produce products of value for society that may be even more beneficial to society than the work of social enterprises or even non-profit organizations. After all we depend on these businesses to provide all the products and services required for our very lives on a daily basis, like low cost healthy food. These are all value propositions that provide social benefits. Groceries reduce starvation. Healthy food improves health. Lower prices reduce poverty. And yet, as Adam Smith emphasizes, serving society is not these companies’ primary motivation. It is their means of pursuing “their own interest” – profit.
Before elaborating on the challenges of social entrepreneurship let’s recap the important points so far. I have defined a social enterprise as an organization willing to forfeit profitability or competitive pricing to provide additional social benefits complementing their primary product offering. I have differentiated between what it means to forfeit for something of value to oneself versus sacrificing something of value to oneself and the ethics of Individualism vs Altruism that underpin those concepts. And I have discussed how neither for-profit nor non-profit organizations are based on sacrifice while providing social benefits. Moreover, all for-profit and non-profit enterprises provide social benefits through the value propositions they bring to the market. With that I will now discuss the challenges of social entrepreneurship as they pertain to the entrepreneurs themselves as well as their relationship with investors, consumers and government.
Entrepreneur’s Challenges
Let’s begin by discussing the potential challenge from social entrepreneurship to a social entrepreneur’s incentive, the investment of time and money to make money. As a social entrepreneur the first issue one must face is the fundamental and inescapable reality that, as an entrepreneur, you are relying on your enterprise as your primary means for earning a living. This is your primary incentive for becoming an entrepreneur. As living entities, all humans are ultimately responsible for sustaining their own lives. To live one must eat. To eat one must work. For an entrepreneur work entails creating an enterprise that fulfills this fundamental requirement, to survive and thrive. Providing a livelihood for oneself through productive achievement is a moral responsibility that must take priority over providing a social benefit to others. Entrepreneurs who fail to provide for themselves provide no benefits for others. At early-stage startups in particular, where financial resources are typically limited and long-term prospects are uncertain, producing something of value must take priority.
“The best thing you can do for the poor is..not be one of them.”
Andrew Matthews, Author ”Being Happy”
Beyond the responsibility to earn a living for one’s self another concept that potentially undermines an entrepreneur’s incentive is implied in the mantra professed by many proponents of social enterprises, “Learn, Earn and Return.” Tristan Walker, who sold his company to Proctor & Gamble, sums up this concept by stating “Spend the first third of your life learning, the second earning, and the third returning. I try to shorten earning so I can maximize returning.” The entrepreneur Zell Kravinsky applied this concept to its irrational extreme end. Not only did Zell feel obligated to “return” to society the $45 million he made as a real estate developer, he donated one of his kidneys to a complete stranger. This is not an example of forfeiting for something one values. It is an example of an altruistic sacrifice of something one values, in this case literally part of one’s self.
The mantra “Learn, Earn and Return” is based on the notion that society provided one’s education, allowed one to earn a financial gain and can now claim that one is obligated to return it to society. An entrepreneur should rightly ask, “What have I taken that I need to return?” To accept such a claim implies the most productive entrepreneurs are nothing more than servants of society who carry a debt to society by virtue of their abilities. This undercuts another important incentive for becoming an entrepreneur, keeping the wealth they produce. Everyone benefits from the social institutions and structures that surround us, and most importantly the great thinkers and producers throughout history that preceded us. It still requires individual initiative and creativity to make something from it. Entrepreneurs are not born into this world with a debt to their fellow man they are obligated to repay through a lifetime of involuntary service to others. It is far more productive for an entrepreneur to adopt a mantra of “learn, earn and reinvest”, which is what many of the great serial entrepreneurs and venture capitalists do.
As well as incentive, an entrepreneur’s motivation can be undermined when choosing to build a social enterprise. Proponents of social entrepreneurship will often claim what makes an idea worth pursuing is not that it motivates and benefits the entrepreneur but it benefits society. That may be taken to imply that the entrepreneur should subordinate their personal vision and motivation to achieve the needs of others. Serving society over serving oneself potentially robs the entrepreneur of the desire, passion and initiative to exercise their creative capacities for their own purposes and for the joy they derive from it. The passion of executing on a worthy goal, confident one is capable of achieving it and seeing it through to completion is what motivates an entrepreneur. It is irrational and altruistic to sacrifice that motivation to others.
For example, why did Steve Jobs create the Apple II, McIntosh, iPad, iPhone and all the other Apple products? He created them because he loved doing it. That’s what motivated him. As he stated, “If you don’t really love it, you will give up.” Moreover, he did not create them because of a deep desire to serve society. As he also stated, “Your time is limited, so don’t waste it living someone else’s life.”
“Money is only a tool. It will take you where you wish, but it will not replace you as the driver.”
Ayn Rand
Investor Challenges
Beyond these personal issues of incentive and motivation social entrepreneurship can hobble the entrepreneur in finding investors. With 75 percent of venture backed start-ups failing in the long term, and many of those that do succeed not highly profitable, many investors will naturally shy away from investing in an enterprise founded on the concept of limited profitability. Investors look to invest in companies with the potential to achieve high profitability, and a high return on investment, not so much to “make a killing”, as to compensate for the many companies they invest in that they lose on. Investors have to make up with one highly profitable company what they lose on others.
Aligning the social entrepreneur’s goals with the investors is essential from the start to avoid conflict later on. Consider the company HABIT (Human Animal Biotelemetry Instrumentation Technology) as an example of this potential conflict and what can go wrong when a founder’s desire to allocate profits to a social purpose runs into conflict with investors. HABIT was a company founded by a marine biologist who initially developed devices to track whales for marine research. Eventually the company also produced custom devices to track other animals, still primarily for research. The company languished for years as the market for such devices is limited and most of the products developed were custom tracking devices, with limited market scalability.
However, a creative entrepreneur-investor joined HABIT as a new CEO with a new vision: to produce a product to track Alzheimer’s patients. Alzheimer’s patients are prone to wander and get lost, which can be fatal for them if they are not found. The families and institutions that care for these patients are therefore a considerable market for such tracking devices. Using elements of its technology for tracking animals HABIT created a simple wrist watch-size tracking device Alzheimer’s patient wore to locate them. With a proof of concept and a good business plan the CEO obtained additional investment from venture capitalists. The company was then successful in developing the product and marketing it on a national basis in association with a nationally recognized Alzheimer’s support organization.
All seemed promising until the founder demanded that the languishing animal tracking endeavors be subsidized by the Alzheimer’s tracking business, because to him supporting wildlife research was just as important as making a profit. The investors did not agree. They were glad to support a profitable enterprise that benefited and saved human lives, but not an unprofitable one that was a more personal interest to the founder than to them. The investors and CEO, representing the primary shareholders and the majority of the board of directors, split off and sold the Alzheimer’s tracking business, letting the animal tracking business fail.
It is important to note that there was nothing wrong with the founder’s original motivation to build a business selling devices to researchers for tracking animals. He had the expertise and passion to do it, and it was a worthy goal to pursue even though, like many business ideas, it didn’t prove to be successful. There was nothing altruistic about that. Originally he had wanted to make profits on animal tracking, but now unfortunately he proposed to forfeit profits to it. Even that may not have been altruistic for the founder, as he valued animal tracking so highly. But it would have been irrational and an altruistic sacrifice for the investors to do so as they did not.
If the founder of HABIT had recognized this from the beginning and created a nonprofit organization to support animal tracking rather than a for-profit company, that organization might have attracted donors who wanted to contribute to that goal; it would not have ended up controlled by investors who would make it abandon animal tracking when something else proved more profitable. Next, an entrepreneur can make a substantial profit by providing a social benefit without any forfeitures let alone sacrifices. Clearly protecting and saving the lives of Alzheimer’s patients has significant social benefit, and HABIT pursued this goal as a profitable venture. In short, for HABIT, the Alzheimer’s tracking business had a social benefit that had value in the market. The animal tracking business also had a social benefit but did not have value in the market.
Consumer Challenges
Next, throughout all of history entrepreneurs have contributed to human advancement by creating products for consumers that added value through innovation. Many social enterprises attempt to add value not through innovation but merely through addition of a social benefit sometimes one completely unrelated to the products being offered. As social entrepreneurs, their investors may forfeit profitability and consumers may forfeit competitive pricing to support such enterprises. However, solving social problems through even these forfeitures, let alone altruistic sacrifices, does not equate to solving them through innovation. Consider the following two examples, both attempting to reduce atmospheric carbon dioxide, and see whether you can discern this essential difference between them.
Let’s begin with Tentree. Its website proclaims its mission:
“At Tentree, we empower everyone to plant trees with their purchases, while offering sustainably made products for everyone to enjoy.”
Tentree makes outdoor clothing from sustainable material sources, and sells it online. For each consumer purchase, the company plants ten trees. There’s even a tag on the clothing with a tree code specific to the ten trees that will be planted in connection with that purchase. Tentree claims to be a for profit company, but is more representative of a social enterprise. As of the end of 2019 it claimed to have planted 30 million trees with a goal to plant one billion trees by 2030. The more trees it plants, the more carbon dioxide it will help remove from the atmosphere over time.
Next consider CarbonCure. Its website declares:
“CarbonCure is leading a global initiative to reduce the carbon footprint of the built environment, using recycled CO2 to improve the manufacturing process of the world’s most abundant man-made material: concrete.”
CarbonCure injects carbon dioxide into concrete to strengthen it, which reduces the amount of cement required to achieve the same structural strength, while sequestering millions of pounds of CO2 from the atmosphere in the concrete. CarbonCure is thought of as a social enterprise but is more of an example a for-profit company with a financial advantage. Using less cement in concrete saves money and improves profitability. As of the end of 2019 Carboncure had sequestered 113 million pounds of CO2 in concrete. Their goal is to remove 500 megatons of CO2 per year from the atmosphere.
Both companies remove carbon dioxide from the atmosphere. What is the distinguishing difference? Tentree achieves its goal of removing CO2 by forfeiture. CarbonCure achieves it through innovation. For Tentree planting trees is an additional benefit unrelated to the company’s products that adds cost, which requires some forfeiture: on the part of the company, through lower profits; on the part of its customers, through higher prices; or both. CarbonCure has created a new and innovative product that offers a value added proposition, removing CO2, in a more profitable way. CarbonCure is not a social enterprise, even though it provides the same social benefit as Tentree. More to the point, through innovation, CarbonCure demands neither forfeiture nor a sacrifice from investors or consumers.
Tentree is an example of a social enterprise, which may well succeed if it finds investors and consumers willing to make forfeitures to support this social benefit. However, it is interesting to note that Tentree’s clothing is made from sustainable materials such as hemp, recycled polyester and even wood fiber. These are all innovate value propositions directly related to the products they sell. Yet, oddly enough, Tentree deems it necessary to add another social benefit, planting trees, to justify their business that is unrelated to their products. This is not only a forfeiture of profitability or competitive pricing but is potentially indicative of the demand for an altruistic sacrifice as well, depending on the motivations of all the parties involved.
Beyond entrepreneurial enterprises, larger public corporations are also being challenged to adopt policies of “corporate social responsibility.” In some countries, like India, it is even required under law that a minimum of 2 percent of a company’s profits be designated for a social benefit. In the U.S. CEO Larry Fink of BlackRock, the world’s largest asset managers with $6.84trillion (2019) in assets, stated that “Society is demanding that companies, both public and private, serve a social purpose.” This in contrast to Milton Friedman’s view that such statements bolster the view “that the pursuit of profits is wicked.”
“Speeches by businessmen on social responsibility…may gain them kudos in the short run. But it helps to strengthen the already too prevalent view that the pursuit of profits is wicked.”
Milton Friedman
It is becoming more and more common for large corporations to advertise their products with an added social benefit whether related to the products or not. As with social enterprises, investors and consumers may very well share these same values, which can add overall value to the corporation in the market place, especially if there is some connection to the products involved. But in some cases, this is nothing more than white washing or green washing.
Moreover, adding an unrelated social benefit along with their products effectively represents nothing more than a charitable donation by the corporation at the expense of investors and consumers. Most individuals invest in companies to make money to use for their own purposes, some perhaps charitable but mostly otherwise. Shareholders might rightly ask why their profits are being spent for a social benefit preferred by members of a board of directors instead of being passed on to them to be spent on their own lives or on the causes they prefer. Consumers might also rightly ask the same question in regard to being charged higher prices, which they may be too poor to afford. It can be argued that consumers and investors as individuals should choose their own donations as individuals instead of having them imposed upon them by corporations and their boards of directors.
Sometimes, however, a corporate social benefit can be appropriately self-serving. The thirty-two National Football League teams, for example, have a foundation that, among other things, supports youth football. This is an example of a social benefit provided by the NFL that is directly related to its product. Advancing the sport of football is in the NFL’s rational self-interest and therefore not altruistic.
When considering the concept of social responsibility, the question one should decide for one’s self is whether that is a decision a corporation should impose on individuals or more appropriately whether it is a decision an individual should make for them self? Or, as some suggest, it is a decision government should impose on both corporations and individuals? While Altruism is a collectivist concept that would support corporations and government making decision for individuals, Individualism contends individuals are responsible for all decisions that apply to them. I shall cover the challenges an entrepreneur faces in their relationship with government next.
Government Challenges
While I do not judge the motivations of those who wish to establish social enterprises, as only they know whether those motivations are based on Individualism or Altruism, I do judge harshly those social entrepreneurs who seek to use government coercion to achieve their social goals. Most consider it is unjust for large corporations to employ corporate cronyism to seek market advantage through subsidies and regulations preferential to their businesses. For example, in 2012 global annual subsidies by governments were $544 billion for the fossil fuel industries. However, for the same reason, it is equally unjust for social enterprises to seek social benefit subsidies. For example, globally the renewable energy industry, claiming a social benefit, in 2012 received $101 billion in subsidies. Both examples represent an attempt to force through government action one’s evaluation of what constitutes a social benefit or not on others instead of allowing people to act on their own evaluations as individuals in a free market.
“Everyone has the right make his own decisions, but none has the right to force his decisions on others.”,
Ayn Rand
The Delaware Chancery Court has stated that a non-financial mission that “seeks not to maximize the economic value of a for-profit Delaware corporation for the benefit of its stockholders” is inconsistent with directors’ fiduciary duties. To avoid this potential liability, many social enterprises incorporate as benefit corporations, or “B corporations”. A benefit corporation is a type of for-profit corporation now authorized by 35 U.S. states and the District of Columbia. It allows the company to define goals beyond profitability and maximizing shareholder value, such as a positive impact on society, workers, the community and the environment. As of 2019 there are over 2,500 B-Corp certified companies.
“Many social enterprises survive only through the largesse of government subsidies, charitable foundations, and a handful of high-net-worth individuals….”
Harvard Business Review
Collectively these subsidies and legal concessions are based on the principle that society through government involvement should give social enterprises special advantages for their efforts to serve society. But who defines what qualifies as a social benefit? Presumably the government, as it is the one doling out the privileges. If so this is a dangerously slippery slope whereby government could gain coercive influence over all businesses by giving preferential treatment to businesses they deem are in alignment with their political social agenda. This creates market distortions that represent a dangerous path for any entrepreneur to count on for their long term financial viability. Advantages that are easily given by government can just as easily be withdrawn, financially ruining a business that relies on them.
“Governments create nothing and have nothing to give but what they have first taken away.”
Winston Churchill
Society Challenges
The final but perhaps greatest challenge a social entrepreneur faces is one presented by society, the very body of people social entrepreneurship attempts to benefit. Consider the following dichotomy. Bill Gates, as a philanthropist, is considered by many in society as a hero for establishing the Bill and Melinda Gates Foundation, which has benefited millions of people. Bill Gates also created Microsoft, which has benefited billions, yet he is not considered by most as society’s hero for doing so. Why? Both are examples of Individualism, the pursuit of one’s rational self-interest. And while philanthropy may be noble in support of one’s values, why isn’t productive achievement considered equally noble, if not more so?
” My philosophy, in essence, is the concept of man as a heroic being, …. with productive achievement as his noblest activity”
Ayn Rand
More surprising is the fact that some in society even criticize the Gates as they contribute only to causes “they deem worthwhile” and not those these critics deem more worthy. They claim it is insufficient to donate what one has earned to that which one values. One must also sacrifice the choice of what they value and to whom they donate it to. This is an application of altruistic principles in the extreme.
Unfortunately it carries weight in part because the philanthropists themselves like Bill Gates sanction Altruism when they make public statements such as “reducing inequity is the highest human achievement” and one has “a responsibility to give back to society”. This is referred to as “the sanction of the victim”. Society may attempt to make victims of entrepreneurs but entrepreneurs should never sanction it.
“It is a moral crime to.…..support your own destroyers.”
Ayn Rand
Conclusion
In summary social entrepreneurship may be an appropriate vehicle for entrepreneurs to achieve their goals, if the forfeiture of profit or competitive pricing required is based on Individualism, the pursuit of one’s rational self-interest. But it is not if they are based on Altruism, which is irrational and self-sacrificing. Individualism and Altruism are philosophical opposites that cannot be reconciled. The philosophical foundation of the entrepreneurial spirit is Individualism, serving society as a means to an end, not as the primary end itself. One’s own benefit should be viewed as singularly sufficient and as noble and moral a goal as any entrepreneur could strive for or hope to achieve. Entrepreneurs should proudly announce the moral value of pursuing ideas for their own benefit through whatever form of enterprise they establish, without further moral justification required. Entrepreneurs should not seek permission or justification from society for launching their business, never subordinating themselves to society nor allowing society to lay claim to that which they have achieved. Such subordination merely enables and emboldens altruists to claim the higher moral ground; and justifies their right to claim ever more. The high ground belongs to a morality of productive achievement based on Individualism over a morality of self-sacrifice based on Altruism.
“Throughout the centuries there were men who took first steps down new roads armed with nothing but their own vision.”
Ayn Rand