The Substance of Entrepreneurship and the Entrepreneurship of Substances

Journal of Entrepreneurship & Public Policy, Forthcoming

24 Pages Posted: 7 Oct 2015 Last revised: 16 May 2016

See all articles by Raymond March

Raymond March

North Dakota State University - Department of Agribusiness and Applied Economics; North Dakota State University - NDSU Center for the Study of Public Choice and Private Enterprise

Adam G. Martin

Texas Tech University - Free Market Institute

Audrey Redford

Western Carolina University - College of Business

Date Written: May 14, 2016

Abstract

Abstract: James Buchanan argues that profit seeking and rent seeking are formally the same sort of behavior, but that the substance of such activities — whether they create or destroy wealth — depends on the institutional environment within which they take place. William Baumol and Israel Kirzner each flesh out this distinction between form and substance in more detail but in different ways. Baumol distinguishes between productive, unproductive, and destructive forms of entrepreneurship, while Kirzner distinguishes between ordinary types of entrepreneurial discovery and superfluous discoveries. In this essay we argue that Baumol and Kirzner’s contributions are complementary, providing a more complete taxonomy of the substance of entrepreneurial activity. We also integrate these ideas with recent work on institutional entrepreneurship that examines changes in the rules governing economic activity. We illustrate this taxonomy by examining entrepreneurial innovation in drug markets both legal and illegal, identifying cases of productive, superfluous, erroneous, unproductive, destructive, and protective entrepreneurship.

JEL Classification: L26, D02, P48

Suggested Citation

March, Raymond and Martin, Adam G. and Redford, Audrey, The Substance of Entrepreneurship and the Entrepreneurship of Substances (May 14, 2016). Journal of Entrepreneurship & Public Policy, Forthcoming. Available at SSRN: https://ssrn.com/abstract=2669776 or http://dx.doi.org/10.2139/ssrn.2669776

Raymond March

North Dakota State University - Department of Agribusiness and Applied Economics ( email )

Fargo, ND 58105
United States

North Dakota State University - NDSU Center for the Study of Public Choice and Private Enterprise

811 2nd Ave N.
Fargo, ND 58102
United States

Adam G. Martin

Texas Tech University - Free Market Institute ( email )

Box 45059
Lubbock, TX 79409-5059
United States

Audrey Redford (Contact Author)

Western Carolina University - College of Business ( email )

United States

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