This article is adapted from a talk presented at the Entrepreneurship Beyond Politics Mises Circle on February 21, 2026, in Oklahoma City.
The title of my talk is “How to Change the World: Entrepreneurship Versus Politics.” But we could probably drop the politics part altogether—and that is what I intend to argue. “How to Change the World: Entrepreneurship” is enough, because politics is largely impotent as a tool for change, at least for those of us who are libertarians.
Politics may work very well if your goal is to oppress people, expand power, or subdue whichever group is politically unpopular at the moment. But if the goal is to advance liberty, politics is a deeply problematic tool. Entrepreneurship, by contrast, is far more effective and far more consistent with our values, ideals, and desired outcomes.
One major problem with politics is that it is always one size fits all. In political struggles, everyone is fighting to impose a single outcome, and then everyone must pass through that narrow gate. Politics leaves little room for different solutions, specialization, or allowing different people to live in different ways. Everyone must follow the state’s rules.
Because politics is majoritarian, success requires convincing a large number of people—sometimes through education, sometimes through persuasion, and sometimes through corruption or what we politely call “campaign donations.” This is not a game libertarians tend to win. In the last presidential election, the Libertarian Party received 0.42% of the vote—quite far from what is needed to win. After more than 50 years of trying, the party’s political success is still elusive, and arguably declining.
Another route some libertarians consider is to change society from outside the state, by persuading enough people to protest or push back. This gives rise to the 3.5% rule: If 3.5% of the population actively protests, change is possible. But “actively” means taking to the streets—loudly, persistently, and in coordinated action. Research suggests that about 7% of Americans might consider themselves consistently libertarian. In other words, it would require mobilizing half of all libertarians at the same time, which seems difficult—especially since we can only get 0.42% to vote for libertarians.
Some argue that we just need to gain control of government and impose liberty from the top down. Perhaps, they say, we simply need to dilute the message enough to appeal to more people. But to what end? How exactly would we use government to impose liberty? People generally do not want liberty—not the version we want. We are trying to sell a product that many people simply do not demand!
“You won’t get government checks anymore, but trust us, life will be amazing!” is a hard sell. And if we force liberty on people, we cannot expect them to respond, “Thank you for doing this against my will.” Forcing liberty down people’s throats is not a libertarian means.
In short, politics fails from a libertarian perspective. In every way. So what is the alternative? How do we move toward a freer society? I believe the most effective path is entrepreneurship. I want to discuss how entrepreneurship changes society—including the political realm—and how it pushes back against the state in ways that voting never will. I’ll consider three aspects: reality, research, and fiction, all of which illustrate what is possible and how to get there.
In the marketplace, entrepreneurs create value for consumers. If consumers value what they offer, entrepreneurs profit. That part is obvious. The real question is: How can entrepreneurship change regulations? How can entrepreneurship change the political environment? How can it push back against the state?
In reality, entrepreneurial innovations regularly transform society and reshape the state. AI is a recent example. It is disrupting industries, jobs, and regulations. Politicians must now adapt in order to remain relevant. They must figure out how to regulate something they never saw coming. Sometimes businesses even ask for regulation—not because they love rules, but because they want the right rules.
A classic example of how entrepreneurial innovations change society is Ford’s Model T. Affordable automobiles radically changed how people lived, worked, and organized their lives. They changed the structure of society. And with these changes came the erosion of old regulations. For example, Denmark is said to still have a law requiring a man with a red flag to walk in front of an automobile in populated areas—to warn horses. It remains on the books, but it is no longer enforced. The innovation rendered the rule irrelevant—so irrelevant that the state no longer uses it to remind us of its power.
A more recent example is Uber and the sharing economy. We all know what taxi service used to be like: Hailing a cab on the street, unreliable service, dirty cars, rude drivers, safety concerns, and high prices. Uber changed everything— not by being another taxi company, but by offering a different, better product at lower prices. Consumers preferred it. It reduced DUIs in college towns. It created new jobs. And it completely undermined the taxi monopolies.
The taxi medallion system in New York City once required drivers to purchase medallions traded at around a million dollars. When Uber entered the market, the value of those medallions collapsed. Monopoly rents disappeared. Uber fought local, state, and federal governments to open the market, and in some cases, even the taxi monopolists begged for deregulation to at least be able to compete in what used to be their cornered market.
These examples illustrate the real power of innovative entrepreneurship. By offering better goods and services, entrepreneurs can change not just markets but the regulatory environment. They force the state to adapt—or retreat.
Turning to research, a growing literature examines “institutional entrepreneurship.” Institutions—whether formal laws or informal norms—shape how we act, but entrepreneurs also shape institutions. Rather than institutions dictating entrepreneurial behavior, the influence runs both ways.
The research literature has found that entrepreneurs adopt one of several strategies with respect to the institutional setting in which they act. They can abide by existing institutions, which means they follow the rules and do what is expected. Abiding entrepreneurship thereby also strengthens the current institutional order. Entrepreneurs can also evade institutions, which means they sidestep too burdensome rules, regulations, and requirements. This is what Uber did with respect to the taxi monopolies—they offered a service that for consumers was in many ways a substitute, albeit a more valuable one, but did so in such a way that Uber escaped the regulatory burdens. Entrepreneurs can also attempt to alter institutions, which means getting involved in politics. They can do so by investing in lobbying or campaigning efforts, or even running for office. This is a very costly strategy, but sometimes entrepreneurs find they have no other alternative. Finally, if the situation is too dire, they can choose to exit. Or simply not start a business to begin with.
I have myself contributed to this literature and wanted to touch on two of my papers. The first one was coauthored with Matt McCaffrey, a fellow with the Mises Institute, and in it we argue that a society’s institutions can be misaligned and cause problems for entrepreneurs through institutional uncertainty. For example, formal institutions like regulations and rules can dictate that entrepreneurs act in certain ways while values, norms, culture, etc. in society—and therefore the expectations of customers— require that entrepreneurs prioritize other things. When this is the case, entrepreneurs find themselves in an impossible situation: Do they follow the law and fail to satisfy customers’ wants or do they do what their customers expect and break the law? This is a common issue in poor countries, perhaps especially in Africa, where cultural norms require entrepreneurs to do certain things or do them in certain ways, but where the law, which might be the dictator’s laws or diktats from international organizations like the IMF or the World Bank, says something very different. No matter what the entrepreneur chooses, there is significant downside.
In another paper, coauthored with Mark Packard, who is an associated scholar with the Mises Institute, we argue that entrepreneurs can themselves create institutions. In fact, entrepreneurs can create transaction platforms that facilitate other entrepreneurship. An example of this is Amazon, where you as a customer can buy things from some producer or seller that you know nothing about. If there is a conflict, or if you are dissatisfied with the product, Amazon steps in to enforce rules. This is not a recent phenomenon and does not require the internet. As Mark and I discuss in the paper, the phenomenon of entrepreneurs creating institutional frameworks within which trade can thrive is quite common and goes back many hundreds of years.
This institutional entrepreneurship literature clearly shows the potential of entrepreneurship not only to disrupt too burdensome and rigid institutional structures, but also to create the institutions necessary to facilitate mutually beneficial trade at low cost—and to engender economic growth.
Finally, fiction. There are several examples of fiction literature and movies illustrating free or alternative societies. In Ayn Rand’s Atlas Shrugged, the productive people go on strike and settle in a valley where they can enjoy each other without being burdened by political decrees or free riders. In Heinlein’s The Moon Is a Harsh Mistress, the stateless society on the moon is contrasted with the statist earth. In Matt Stone’s On the Steppes of Central Asia, the country of Mongolia is a free society that through voluntary organizations produces a sham-state front to fool foreigners and make them believe the Mongols are just as statist as everybody else. But whereas these are good stories, they in different ways make the same mistake I mentioned in the beginning: They adopt a one-size-fits-all approach. Schulman’s Alongside Night is here much more fascinating and also much more libertarian. In it, entrepreneurs engage in free trade—real free trade, not managed trade. They do so right where they are, embedded in statist society, without needing to have their own geographic area or territory. Instead, they turn their backs on the state and trade voluntarily on the terms they see fit.
This type of solution does not require an all-or- nothing approach. Every transaction can be undertaken either in the voluntary realm or under the scrutiny of the state. People already do this. When you hire the neighbor’s kid to mow the lawn without setting up a contract, making sure licenses and other requirements are satisfied, reporting the payment to the IRS, and so on—you are trading in the voluntary realm. And by doing so, you not only withhold the taxes that the government would otherwise extort, but also create a truly win-win-win situation: You win because you get the lawn mowed at a good price; the kid wins because he or she gets work experience and makes a little money; and everybody else wins by being reminded that voluntary exchanges do not require a state.
So where does this all lead us? I think what reality, research, and fiction have in common is that they all show the power of entrepreneurship not only as a means for profit and technological innovation but as a force for societal change. Entrepreneurship is an effective means of disrupting institutions as much as of disrupting economic structures and outcomes. Entrepreneurship is a voluntary undertaking that causes change by providing value. No force, no threats, and no coercion are involved. It is market action fully in line with our libertarian ideals. And it provides alternatives, produces variety, and makes an offer that you can refuse. Quite unlike engaging in politics.
And, importantly, entrepreneurs do not ask permission.
