Peter Klein Explains: What Is Entrepreneurship?
In this interview, Peter Klein explains what entrepreneurship is, what it means for the economy, and how the state distorts it.
Niaz: To me a great entrepreneur is someone who understands economics, can see the big picture, and analyzes the things globally. He is also an economist, a research scientist, and a remarkable doer. What are the core things of economics and globalization should entrepreneurs be master at?
Peter: I think everyone should understand basic economics—say, by reading Henry Hazlitt’s classic Economics in One Lesson. Most of economic principles are common sense: there’s no such thing as a free lunch, benefits and costs should be compared at the margin, voluntary exchange is mutually beneficial, actions often have unintended consequences, and so on. Basic knowledge about globalization—the radical drop in communication and transportation costs, the often-surprising differences in legal, political, and social rules and customs around the world—is important too. But I don’t think a deep theoretical knowledge of economics or international trade is a prerequisite to successful entrepreneurship. Intuition and experience are typically more here valuable than “book learning.” (And I say that as a university professor!)