THE COLLEGE HILL INDEPENDENT


The Leadership Function

Systematizing entrepreneurship in the university

by Izzi Olive

Illustration by Eliza Macneal

published March 3, 2020


Meritocracy is perhaps the most embedded of our various apologies for capitalism, and so its logic is familiar enough. With it, success in market society can be explained away as a natural occurrence. The titan of industry—the paradigmatic capitalist—embodies this fantasy of just desert: they followed the rules, and it paid off.

If we understand this as the mythology of the meritocrat, the mythology of the entrepreneur offers a subtle, lawless variant. The entrepreneur is disruption embodied. Unlike the traditional capitalist, who’s in the business of producing what society already knows it needs, the archetypal entrepreneur trammels the old ways and revolutionizes the economy by force of will. This, at least, is the most glorified articulation of the entrepreneurial mythology, and we can note that in this particular formulation, the entrepreneur’s charisma derives precisely from their breaking the rules to which meritocrats subscribe, and then proceeding to succeed in even greater proportion. Bezos, Gates, Musk, Zuckerberg, Jobs: the mythology about these guys is that they dropped out of college, led heterodox upstarts, and delivered something society hadn’t known it needed. These details may not be true, exactly, in each of these cases, but in the world of myth, this is hardly important. What is unquestionably true is that when these men are celebrated, it is for their audacity, for impressing their will upon the fabric of society.

The entrepreneur, then, offers an alternative to the meritocratic apology for capitalism. Alex Gourevitch, professor of Political Science at Brown University, prompts us to consider what these fantasies reflect about political economy today. If the entrepreneur's meteoric rise rivals the meritocrat’s measured advance as the preeminent fantasy of capitalist success, it might seem that the meritocratic path appears increasingly untenable—that the traditional structures of success are simply unpromising. But beyond offering a liberatory fantasy in the face of systemic disillusionment, the entrepreneur seems to give us something more fundamental. As Gourevitch remarked on leftist global politics podcast Aufebunga Bunga in 2019, “when entrepreneurs truly are entrepreneurial, they remind us of the human potential to exceed the normal and natural of everyday life. To reach beyond where you normally have to find yourself." This is to say that entrepreneurs, on the public stage that is the economy, serve as inspirational spectacle. But if we look to the entrepreneur as a model of human potential, we must ask for whom, and how, entrepreneurial feats are made possible.

 

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In certain discourses, entrepreneurship serves as an ‘everything good’ catch-all. Entrepreneurship is dynamic, creative, nimble; its purview is not limited to the traditional ‘business world.’ Through the category of 'social entrepreneurship,' in particular, entrepreneurship is invoked as the silver bullet by which social ills might be transcended. These capacious definitions of the entrepreneur are conspicuously expressed in the university. In 2016, Jacobin reported that despite the decline in the absolute number of start-ups in the US over the past 30 years, entrepreneurship has ballooned in higher education—the number of entrepreneurship courses offered in colleges and universities has increased more than five-fold over this time period, with over 400,000 US college students taking courses in entrepreneurship in 2013. Brown University proclaims itself to be at the vanguard of institutionalized entrepreneurship. Prior to the 2019-2020 academic year, the University had offered an undergraduate concentration that included entrepreneurship since 2007. This year, the University subsumed the latest iteration—the concentration in Business, Entrepreneurship, and Organization (BEO)—into two existing academic departments. Brown now offers an undergraduate ‘certificate’ in entrepreneurship, to be administered by the Nelson Center for Entrepreneurship, established in 2016.

The Nelson Center, like other university programs intended to cultivate entrepreneurship, rests on the premise that entrepreneurship can be taught. The very concept of entrepreneurship pedagogy is somewhat arresting in light of the conventional mythology of the entrepreneur: Is not the entrepreneur a charismatic, disruptive figure whose defining traits lie beyond the reach of pedagogy? The Nelson Center’s signature three-step ‘entrepreneurial process’ seems diametrically and self-consciously opposed to these conceptions. This process, which has structured Nelson Center Director Danny Warshay’s private consultancy since before the Center’s opening, is schematized as follows:

1. Find & validate an unmet need

2. Develop a value proposition

3. Create a sustainability model

In this methodology, entrepreneurship emerges as something entirely different from how we might know it from well-worn cultural myths—apparently requiring none of the entrepreneur’s ineffable characteristics.

When asked by the Independent why he holds the view that entrepreneurship is now more socially necessary than ever before, Warshay stated simply that there are more global problems today than ever before. This view of entrepreneurship carries within it a long history of theorizing the entrepreneur, arguably founded on the theorizing of the market as the forum for the expression of elite will. At the same time, Warshay’s remark also captures a fundamental reality of capitalist society: that progression occurs through innovative acts of entrepreneurship. In this sense, the “entrepreneurship racket” (in the words of Jacobin’s Avery Wiscomb) that consumes universities today feels both old and new. On the one hand, it’s just the latest rendition of the old model of the entrepreneur—still a vessel to impose the will of the few on the lives of the many. Yet the new notion that entrepreneurship can, and should, be taught—especially at what Gourevitch calls “ruling class colleges and universities”—as well as the new ubiquity of the concept, gesture towards new forms of capitalist enclosure necessitating new fantastical strategies of ‘escape.’

 

The roots of the concept

In his forthcoming article “Capital Personified,” Gourevitch traces foundational theories of the entrepreneur’s role in political economy, beginning with early 18th-century theoretician Richard Cantillon and culminating with 20th-century Austrian political economist Joseph Schumpeter. This genealogy highlights the important divergence of Schumpeter’s notion of the entrepreneurial “leadership function” from previous theories in which the entrepreneur’s acts were crucial in the economic system, but held little cultural meaning. Because Schumpeter conceived of the economy as a forum for the production of culture, values, and civilization, he imbued entrepreneurial acts with moral significance. Schumpeter’s entrepreneur makes history; his interventions into the otherwise static state of the economy effect economic growth, but more significantly, they are acts of leadership which renovate civilization.

Such acts of history-making are fundamentally coercive for Schumpeter because they divert some portion of the fixed amount of capital in the economy away from the pre-existing projects and towards the entrepreneur’s own innovative project. Gourevitch notes that Schumpeter’s language conveys the aggressive quality of these acts: capital confronts, the entrepreneur forces. But since the entrepreneur heralds civilizational advance, this coercive act is seen as a social good.

Schumpeter’s entrepreneur is not a creative figure. He is exceptional not for his ability to invent, but his ability to innovate in a way that can catch on in the market. By recombining existing technologies or services, the entrepreneur offers something new. And insofar as society had not previously expressed its value for this new thing, which did not previously exist, the entrepreneur’s innovation transforms societal values. Schumpeter thus offers a working definition of actual economic entrepreneurship which is conceptually useful to distinguish it from the many colloquial uses of the term—for example, to refer to small business-owners, or to a certain plucky resourcefulness. His definition is also useful as a historical referent because select concepts of Schumpeter’s are enthusiastically invoked in entrepreneurial discourse today, while others—namely his view of the economy as a space for the expression of elite will—have been left behind.

Schumpeter’s acknowledgement of the force involved in entrepreneurship did not amount to a condemnation of the entrepreneur. The entrepreneur’s exercise of power within the economy was natural and necessary — a view predicated on Schumpeter’s vision of inexorable civilizational progress, with the forceful entrepreneur showing the way. By contrast, today’s notional entrepreneur represents anything but coercion, despite the fact that successful entrepreneurship still entails control over immense amounts of labor and capital.

 

Schumpeter to Drucker and back again

With Schumpeter’s entrepreneur as our working definition, the idea that we can all be entrepreneurs is hardly intuitive. Yet this notion has taken root in popular discourse, largely due to the contributions of mid-20th century management theory, particularly that of consultant and author Peter Drucker. Historian Angus Burgin has argued that Drucker’s intellectual trajectory, from his early writings of the 1940s to his most influential work, The Principles of Management, first published in 1954, reveal an underlying shift in attitudes towards automation during that time. Taking stock of the mechanical nature of factory labor in the 1940s, and doubtful of the state’s capacity to intervene in industrial organization, Drucker initially proposed management and organization as a means to combat the alienation of worklife. By granting the worker leeway to integrate tasks with “executive function”—requiring thought and judgement—Drucker proposed to reimagine industrial worklife in the model of unalienated craftsmanship. But the contributions for which Drucker is best remembered today bear little trace of these early concerns regarding the “social pathologies of industrial civilization,” in Burgin’s words. This, Burgin argues, is the result of Drucker’s adoption of a euphoric attitude towards new technologies, reflected in his theorizing of a new type of worker altogether: the knowledge worker.

Like many of his contemporaries, Drucker became seduced by the liberatory potential of automation. Drucker came to believe that machines would enable the industrial worker to act as an entrepreneur at every level of the corporation. Working in tandem with intelligently-designed machines, the knowledge worker would be able to exercise executive function. This embrace of automation all but supplanted Drucker’s earlier concerns. Corporations and business schools alike soon integrated management theorists’ cybernetic techno-futurism, which remains distinctly visible in contemporary philosophies of corporate organization and business school curricula. As new technologies made old concerns seem obsolete, Burgin writes, “Schumpeter's chiliastic vision thereby began to evolve into the relentlessly optimistic discourse of entrepreneurship that has pervaded business education ever since.”

As Gourevitch notes, however, the experience of the vast majority of workers today is a far cry from entrepreneurial. At the Amazon fulfillment center, or the call center, or in any number of other occupations, the worker is more machine than ‘self-author,’ contrary to the entrepreneurial mandate of creative license to be borne from the liberatory force of automation. Automation no longer carries the techno-utopian sheen that swept up Peter Drucker half a century ago. Instead, automation is now often invoked as a threat to the worker. But the indelible mark of management theory is that corporate organization is now offered as a corrective to such ambivalence towards automation and other forms of industrial malaise. This equation of entrepreneurship with industrial freedom at all levels of the corporate structure underlies the vast array of institutions dedicated to the theory and practice of entrepreneurship which have taken hold since Drucker’s time.

Management theory reimagined entrepreneurship as a way of operating within business contexts which organization could facilitate. No longer defined in strictly economic terms, the concept became increasingly diffuse, to the extent that entrepreneurship could be understood as an assimilable attitude. Observing the growth in organizational approaches to entrepreneurship that gained steam in the 1990s, for example, in Brown University's Business, Entrepreneurship, and Organizations undergraduate concentration, it’s tempting to say that the institutionalization of entrepreneurship has amounted to its ‘meritocratization.’ If entrepreneurship is governed by rules and structures, then it would seem that becoming an entrepreneur is no different from becoming a typical capitalist. But in important ways, the Schumpeterian logic of the entrepreneur has been preserved, even as a vast body of theoretical work has reimagined the entrepreneur as the everyman, rather than the ubermensch. While the rhetoric of entrepreneurship may now be ubiquitous, the model of entrepreneurship most likely to produce actual entrepreneurs, in the sense of individuals who begin and expand their own ventures, continues to be structured around individual vision that is, crucially, situated within elite institutions.

 

Institutional history at Brown

That Brown University has placed itself at the vanguard of the general turn towards institutionalizing the mythological naturalism of entrepreneurship is written across its entrepreneurship programs. The "Mission" page of the Nelson Center’s website features a banner reading: “Entrepreneurship: An Essential Part of the Brown Experience.” The text which follows tells us how this is so: “With centuries of innovative research, teaching, and learning, Brown has always been fertile ground for entrepreneurial thinking.” Entrepreneurship, in the Center’s lexicon, is synonymous with problem-solving, and this definition allows for “entrepreneurial thinking” to be read into the university’s ‘institutional tradition.’ The Center further elaborates its usage of the term as it outlines its pedagogy: “While we love the optimism and can-do spirit that is the hallmark of most entrepreneurs, what we teach is something altogether different: entrepreneurship as a structured process.”

In sum, entrepreneurship is problem-solving, and problem-solving is a process which can be systematized and learned. The three-step process at the heart of the Center’s pedagogy, is framed as the Center’s key divergence from “most entrepreneurs.” Juxtaposed with the purportedly characteristic optimism of most entrepreneurs, we get an intimation of the figure of the Nelson Center entrepreneur as calculated and sober, a trustworthy realist.

The Center’s funding of student ventures loosely corresponds to its staged model for entrepreneurship. The lowest level is the ‘Explore Grant,’ which at $250 is designed to help students “find and validate an unmet need.” From there, students may apply for the $2,500 ‘Expand Grant’ — intended for “developing a value proposition,” or a salable solution to the need they have found. The $25,000 ‘Venture Prize,’ and the $50,000 ‘Venture Founders’ award, specifically for students founding startups in Rhode Island, are meant to get ventures "off the ground." In addition to funding, this top tier of programming also confers more intensive advising by “a deep and knowledgeable roster of mentors, industry contacts, and experienced entrepreneurs,” as well as meetings with venture capitalists.

The Nelson Center describes itself as an “equity free zone,” meaning that none of its grant offerings are tied to a stake in student ventures. However, the Center’s existence and continuation does depend on the success and support of Brown alumni. On its website, the Center addresses student entrepreneurs with the following: “If (when?) you go on to great success our hope is that you’ll help pay it forward by supporting the next generation of Brown entrepreneurs!” ‘Paying it forward’ can mean financial donations, but non-financial ‘philanthropy’ is perhaps more significant to the Center’s model. By offering mentorship, sharing contacts, and facilitating access to venture capital, alumni constitute the Center’s “networks of support”: webs of human, social, and sometimes literal capital.

Since entrepreneurship no longer falls under any of Brown’s academic departments, the model for its perpetuation at the University is necessarily unlike that of academic concentrations. Though the certificate program receives university funding, without a designated concentration, the revenue stream for entrepreneurship is divorced from the departmental model, and now relies to a greater degree on the entrepreneurs it produces. There are certain advantages to this model — for instance, some might say that funding of business ventures, or the development thereof, is a misplaced use of university resources. Such criticisms revive old debates over the ultimate pursuit of the university, with blatant support of the world of business and profit seeming to cheapen the classical vision of the university as a space for the pursuit of knowledge and excellence. Nevertheless, one result of distinguishing entrepreneurship from the pursuits Brown enshrines in academic concentrations is to make the University’s status as entrepreneurial all the more explicitly self-reinforcing. In the Center’s “sustainability model,” to borrow its term, entrepreneurship is intended to breed entrepreneurship—establishing Brown as an ever-more influential architect of the world through the broadening of its networks of capital.

The Center’s model of entrepreneurship is also unmistakably individualistic. As one student participant in the Nelson Center’s summer accelerator program remarked in a promotional video, “Getting to do something that’s for me and not for someone else is really special. It gives me the ultimate freedom to me and to make the impact I want to make.” ‘Making an impact’ is familiar language in public interest discourse, but in the context of entrepreneurship, ‘impact’ seems to refer less to the magnitude of social change than to the individual’s mark.

The Nelson Center does promote social entrepreneurship, but first and foremost, it promotes successful entrepreneurship. Funding allocation is “agnostic with respect to what sectors or industries ventures are working in, or even whether they are commercial, social, or have blended approaches.” Instead, funds are awarded to the projects deemed most viable according to the rubric of the Center’s three-step process of entrepreneurship. In this practice, entrepreneurship becomes an end unto itself. No one “opportunity or challenge” is seen as more significant than any other; the mere existence of latent demand justifies its fulfilment.

 

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As Alex Gourevitch explains, the particular political importance of the entrepreneur is that under capitalist society, “it really is the case that [...] this is how creativity and innovation takes place.” In other words, it’s not only that we look to entrepreneurs as models of human potential. It’s also that materially speaking, entrepreneurs drive economic innovation, and therefore social change. So long as the traditional individualistic model of entrepreneurial creativity continues, entrepreneurial acts will continue to reflect the entrepreneur’s desires, or, in the most socially-conscious scenario, the entrepreneur’s diagnosis of others’ desires.

The narratives surrounding entrepreneurship work to conceal this reality. By the logic of Brown’s Nelson Center for Entrepreneurship, the recognition of a market opportunity amounts to a justification to exploit it. Much like Schumpeter’s entrepreneur, this entrepreneur need not be creative. Instead, this entrepreneur needs only a discerning perspective on society, and the access to capital to act upon their diagnoses of its latent desires—tools at the disposal of only a few.

In rejecting the personalistic mythology of the entrepreneur, the Nelson Center proposes that we are all capable of the human act of entrepreneurship. This is ‘human’ in the Schumepeterian sense of history-making—human in leaving one’s mark on the world. This fantasy, of making an impact, is as legible today as it was when Schumpeter wrote a century ago. But what has been left behind—fallen out of fashion, perhaps—is recognition of the force necessary to make an impact. For Schumpeter, the entrepreneur’s ability to marshal such force was intimately tied to the entrepreneur’s right to disrupt the status quo, to nudge civilization onward. Schumpeter did not shy away from the reality that only a select subset of society has the power to innovate in the economy—the entrepreneurial class, while not benevolent, worked for the benefit of all—even if the masses would not recognize the situation as such. The suggestion that entrepreneurship is about the imposition of elite will to the supposed greater benefit would likely discomfort most contemporary institutions that teach and promote entrepreneurship, yet individualized creativity seems to inevitably point in this direction.

The problem we are left with is, in Gourevitch’s words, that of taking seriously the problem of thinking about creativity. Gourevitch explained to Aufebunga Bunga that this problem is more specifically one of “thinking about creativity not a semi-conscious process by which a few so-called geniuses impose their will on people who don’t realize what’s happening, but instead as something much more conscious and collective that could in principle happen through collective political activity rather than through the market.” Society is rife with problems, but the fact that an entrepreneur can turn a profit does not amount to a solution.

 

IZZI OLIVE B‘20.5 believes that anyone can be an entrepreneur, herself excepted.