The Entrepreneurship-Philanthropy Nexus: Nonmarket Source of American Entrepreneurial Capitalism

Abstract

What differentiates American capitalism from all other forms of industrial capitalism is a historical focus on both the creation of wealth (entrepreneurship) and the reconstitution of wealth (philanthropy). Philanthropy has been part of the implicit American social contract that continuously nurtures and revitalizes economic prosperity. Much of the new wealth created historically has been given back to the community to build many of the great social institutions that have paved the way for future economic growth. This entrepreneurship-philanthropy nexus has not been fully explored by either economists or the general public. The purpose of this paper is to suggest that American philanthropists-particularly those who have made their own fortunes-create foundations that, in turn, contribute to greater and more widespread economic prosperity through knowledge creation. Analyzing philanthropy sheds light on our current understanding of how economic development has occurred, as well as the roots of American economic dominance.JEL classifications: D64 -Altruism; M13 -Entrepreneurship; M14 -Social Responsibility.

Biodiversity for Billionaires: Capitalism, Conservation and the Role of Philanthropy in Saving/Selling Nature

“…The term philanthropy, deriving from the Greek for 'love of humanity', was coined in the seventeenth century, associated with enlightenment thinking, later explored by Adam Smith (1759) in The Theory of Moral Sentiments. Yet it was industrial capitalism in the USA during the late nineteenth and early twentieth centuries which came to define philanthropy and its place in society (Acs et al, 2007;Gross 2003;Vogel, 2006). During this time, industrialists such as Andrew Carnegie argued that the profits of capitalism should be redirected to social goals, stewarded by the wealthy, to create large-scale change to solve the problems within society which other parts of capitalism had yet to reach (Gross, 2003;Sawaya, 2008;Vogel, 2006).…”

“…There may be a feedback loop between enterprise and philanthropy, where successful entrepreneurs fund causes (e.g. universities) which create further enterprise and therefore further philanthropy (Acs et al, 2007). Attitudes towards philanthropy may be a good barometer of the relationship between society and capitalism, an indicator of what is considered appropriate and fair dealings (Sawaya, 2008).…”

Democratic Capitalism and Philanthropy in a Global Economy

“…The "entrepreneurial spirit" is credited with a great deal of economic success in the United States (Acs et al, 2007), particularly with respect to employment and income generation (Hebert and Link, 1989). As a result, entrepreneurship is promoted through policies (Hart, 2001) at different levels of government.…”

“…This relationship differentiates the American political economy from other capitalist countries. Acs et. al.…”

Volunteer tourism: at the crossroads of commercialisation and service?

“…On the one hand, charity focuses on the immediate, symptomatic social problem, that is, feeding large numbers of homeless people or providing shelter for refugees. Philanthropy, on the other hand, is designed to achieve the actual socio-economic mobility of people (Acs, Phillips, Audretsch, & Desai, 2007), and it seeks to create long-term improvement by empowering people. Charity, on its own, on the other hand, is often seen as not providing a lasting solution and is argued to be harmful (Dees, 2008;Yunus, 2006).…”