Democracy and Entrepreneurship

Abstract

Entrepreneurship has been claimed to matter and deserve priority because it has been linked to some of the most compelling economic and social issues of our time. This paper suggests that entrepreneurship is also inextricably linked to a fundamental value common among the western developed economies, democracy. Three distinct contexts are examined to link democracy to entrepreneurship, two historical and one contemporary. The first is National Socialism in Germany, which emerged by suppressing both entrepreneurship and democracy. The second is the rise of the Trusts, or dominant large corporations and concomitant decline of small business in the United States at the end of the nineteenth century. Finally, both measurement and perception suggest a decline in democracy as well as entrepreneurship in the contemporary era. These concerns are only exacerbated in the current Covid-19 crisis. The paper concludes that an important policy mandate for entrepreneurship may be to ensure the independent, decentralized and autonomous decision-making serving as a cornerstone of democracy.