Entrepreneurship and Philanthropy in American Capitalism

Abstract

The creation of wealth (entrepreneurship) and the reconstitution of wealth (philanthropy) differentiates American capitalism from other forms of capitalism. A new area of research, entrepreneurship philanthropy, will facilitate the economists' and general public's understanding of the role of philanthropy, as well as how American philanthropists contribute to economic prosperity through opportunity, knowledge creation, and entrepreneurship. The American model of entrepreneurial capitalism may be the only "sustainable" model for global development, in its historical focus on both entrepreneurship and philanthropy. To demonstrate that the role of philanthropy increased as new wealth appeared in the United States in the nineteenth century the roles played by philanthropists such as Andrew Carnegie, George Peabody, Johns Hopkins, John D. Rockefeller are reviewed, and Bill Gates is considered a successful contemporary counterpart. The essay's six sections revisit the view of self-interest as a fundamental institution of capitalism, and propose six research agendas that will alter economic theory's underlying premise (of a self-interest motivation for human activity): (1) identifying wealthy entrepreneurs and measuring their philanthropic contributions, (2) quantifying the extent to which wealthy entrepreneurs are involved in philanthropic activities, (3) comparing the achievements of today's philanthropic entrepreneurs against late nineteenth and early twentieth century landmark philanthropic achievements, (4) identifying the reasons behind philanthropic activities (self-interest or altruism), (5) asking whether economic theory should change its underlying premise, (6) assessing how these activities vary across countries. The study of philanthropy is important in understanding American and global capitalism in the twenty-first century.(CBS)

Keywords: History, Motivation, Philanthropy, Altruism, Capitalism, Economic growth