Commanding entrepreneurship? Good grief

Commanding entrepreneurship? Good grief

Oxymoronic behavior by government malpracticing “public policy” is nothing new, of course. It brings to mind that old line from Ronald Reagan: “The nine most terrifying words in the English language are: ‘I’m from the government and I’m here to help.’”

Consider the concept of entrepreneurship, the backbone of innovation and progress. By definition, it is fueled by those in the private sector risking their own money, and oftentimes that of private investors, in pursuit of profit.

The best way for government to foster entrepreneurship is, simply put, to get out of the way with the lowest tax and regulation regimens possible. It’s certainly not using public dollars in an always perverse attempt by government to pick “winners” that fit its command economics model.

But a new study, by the University of Pittsburgh School of Law and Duquesne and Carnegie Mellon universities, among others, turns that fundamental truth on its head in what only can be described as academic and “social justice” gobbledygook.

As detailed by the Post-Gazette, the study concludes “that Pittsburgh, while it has some strengths for fostering entrepreneurship, requires more capital, business and legal resources to promote a more robust social entrepreneurial system.”

The baseline premise here is that the erstwhile Steel City lacks “diversity” in its entrepreneurial community. “Their hypothesis states (that) diversity falls by the wayside when entrepreneurs emphasize financial stability,” the P-G reports.

Oh, the sheer gall of those dastardly entrepreneurs!

And, horror of horrors, the newspaper account continues, paraphrasing the sentiment of one nonprofit economic development agency official, “would-be entrepreneurs are unemployed or end up without jobs when their enterprises fail.”

That same official goes on to note that “As the unemployment rises, the opportunity share decreases.”

Never mind that entrepreneurism, and capitalism itself, require failure for success to happen.

Using government money, as these groups are wont to demand — to supposedly “ensure” success — is a misallocation of precious resources that perverts the concept of entrepreneurship.

Outrageously, those behind this effort complain that, again, as the P-G reports it, “existing businesses leave little room for new enterprises that want to emphasize social entrepreneurship.”

Wealth-transference that sucks dry the entrepreneurial spirit is preferred to wealth-creation that benefits all, is that it?

Here’s another interesting aspect of this tale:

These champions of wealth-transference in pursuit of their “social entrepreneurial system” bemoan that the Urban Redevelopment Authority, from 2014 to 2016, spent only about $10 million for “entrepreneurial projects” that “created” 559 jobs.

After all, they claim, Cincinnati spent $42 million in “comparable economic development resources” to “create” 2,347 jobs.

In each example, that’s a cost per job of nearly $18,000.

But that’s not a proper function of government to begin with; it is a function of the private sector, a sector that will, given a fair tax and regulatory climate, create jobs in a more efficient manner.

Nowhere is this nonsense appallingly starker than in the City of Pittsburgh’s effort to stock an “affordable housing fund.” In the name of “affordable housing,” it is, in phases, jacking up the realty transfer tax.

Think of the illogic here: Making housing “affordable” by making housing less affordable.

And that’s just the beginning; there’s talk of creating a $3 billion “Social Investment Fund” in Pittsburgh. Officials say it would be patterned after the woefully rigor-less Pittsburgh Promise scholarship program for Pittsburgh Public Schoosl students.

As Allegheny Institute President Jake Haulk noted in a November 2016 white paper, and more apropos now than ever:

“Given the long and sad history of failures of social engineering in Pittsburgh, one would think that the visionaries who now think they can mold the world in a certain way … would be a little less sure of themselves.”

Haulk reminded that Pittsburgh’s population has continued to fall over the last quarter century. There has been no net increase in employment. And the city school system has gone from bad to worse.

Additionally, Pittsburgh continues to spend too much and tax too much as it chases development schemes that do not produce the desired outcomes, he added. And, not to forget, for an embarrassingly long time it ignored its water and sewer system now on the verge of collapse.

“More reliance on market competition, a friendlier business climate and fewer efforts to control the businesses already in the city would be a much better approach for the future of Pittsburgh,” Haulk concluded.

Or as Jane Jacobs, the late, great scholar of all things cities, concluded a half-century ago, “Pittsburgh is a good illustration (of central planning failure) because so many irrelevant things have been tried there, so ambitiously.”

Then as now.

Colin McNickle is a senior fellow and media specialist at the Allegheny Institute for Public Policy (cmcnickle@alleghenyinstitute.org).