Courage

A few days after I arrived in Diitabiki, I found myself listening in on a discussion of a micro-financing opportunity, which is generally an attempt by a non-profit organization to help get businesses started by lending a small amount of money at low interest. What disturbed me about the situation was the ridiculous seventeen percent interest rate. What disturbed my neighbors was the risky prospect of actually making monthly payments.

In my weekly radio program on basic business economics I am trying to stress the necessity of trying new things and risk-taking to economic growth. As I write and host the show in the Aucan language, a native speaker helps me revise and edit each episode I write. I had to ask what the word “risk” is in Aucan by describing a man in a dugout canoe heading toward dangerous rapids. To “take a risk” in Aucan is essentially to “take a thick heart, ” which implies something Americans tend to forget in regard to business enterprise—courage.

Alexis de Tocqueville, a young Frenchman who came to America in the nineteenth century to learn about our culture of democracy, used the clipper ship to illustrate American economic courage. He said that while clipper ships were extremely fast and had opened up a wave of new opportunities for international markets, they were also very dangerous. American sailors, however, would push their vessels to the limit to see how fast they could go. De Tocqueville claimed that this was because we considered engaging in risky enterprises a virtue. Nineteenth century Americans hailed as heroes those who risked their lives on the open seas to lower the cost of trade.

Today we still consider entrepreneurs an essential part of our economy, and rightly so. While people who take the risks of beginning something new wish to benefit from their ideas, they often stake their livelihood in hopes of making the lives of others better. Entrepreneurs can succeed only if what they produce helps people so much that buyers are willing to cover the high costs to get it to them. It is courageous to do what you believe is good for other people to your own potential detriment.

If we remembered that those who are wealthy from fair business practice have received their reward for providing people with things they need, we would also remember that economic risk-taking requires courage. Instead, it is fashionable to charge such people with some breed of extortion and attempt to correct income inequality by taxing rewards away from those who do well. Such practice discourages new ideas, and hence, new growth. Emphasis these days is on the consumer’s supposed responsibility to buy. What really needs to happen is for people to take risks to find things that others actually want to buy, rather than making them feel guilty for not spending enough to sustain the economy. For this to happen, however, we need to allow entrepreneurship to become courageous again.