Value and Growth – W15.4

A century ago, Joseph Schumpeter posited the idea of creative destruction to describe the way in which economies grow. He suggested that creative entrepreneurs find new ways to make use of resources (human and material) to increase the value of outputs with the same inputs, or produce the same outputs for reduced input costs. The key to this process is not the availability of more capital, labor, or natural resource, but rather the accumulation of more knowledge. Unlike all other commodities, there is no limit to the amount of knowledge that can be acquired.

In order for entrepreneurs, and hence a country’s economy, to thrive, using bail outs and subsidies to sustain older, or simply less efficient, firms will actually have a negative impact on growth. The regulatory environment for business must balance the type of liberal democratic system that allows for creativity and adventure with enough social welfare institutions to help the vast majority of the population effectively cope with the pace of change. The more conservative approach of shielding people and firms from change can only lead to the ultimate destruction of an economy.

Over the past several years, business has become less and less about providing goods and services, and more and more about using money to make money, through a variety of complex investment mechanisms (derivatives, algorithmic trading). Shareholder value has become the ultimate measure of corporate success and the social value of enterprise is largely neglected. However, the perpetual accumulation of capital does not represent true economic growth, and the increasing distance between rich and poor reflects the fact that as the richer get richer, capital actually disappears from the economy, eventually grinding it to a halt. Schumpeter’s prescription seems simple and obvious. Capitalists have money, but no ideas. Entrepreneurs have ideas, but no money. It is only when these two groups interact in a cyclical manner that an economy grows, and provides for all members of society. So, why aren’t we doing this?

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About Robert A. Campbell, PhD

Robert A. Campbell, PhD, teaches courses in change management, leadership, and organizational behavior, as part of the MBA program in community economic development, for the Shannon School of Business at Cape Breton University.
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62 Responses to Value and Growth – W15.4

  1. Lindsey MacIntosh says:

    I think the lack of working together for the betterment of society has a lot to do with that we discussed in class this past Friday and that is the fact that individuals in the capitalist positions simply don’t want to. They are in the position to pick and choose what sort of investments they wish to get involved in and for the most part they are not interested spending their money on anything that comes with materials and resources. Entrepreneurs are at the mercy of venture capitalist, venture capitalists have all the money. What’s funny is you can have someone with a mediocre idea but lots of money and then have an amazing idea and no money, that idea is lost. Entrepreneurs are people trying to make society a better place, they are trying to create jobs and opportunity, capitalist simply do what they want when they want. The rest of society is not a concern for them, they want for nothing, and anything they do want they buy. Schumpeter’s prescription seems simple and obvious and that’s why it will never work!

    • Lijuan Wang (vivian) #20142447 says:

      I totally agree with what Lindsey MacIntosh said that why these two groups cannot work together is individuals in the capitalist positions simply don’t want to. In my opinion, there are several reasons why individuals in the capitalist positions simply don’t want to. First, Society has become more and more substance. In other words, you can do anything you want once you have money. So individuals in the capitalist positions, at some levels, control the power of society. As a result, they would do what they want and manipulate the power and money. Second, the gap between rich and poor is becoming bigger than before; that is hard for all citizens own the same aim to develop their society and economy. According to their social position and the level of their economy, the standard for success even for lifestyle is totally different. There is no any common for these two groups, so it is very hard for these two group work together to make benefit for the entire society.

  2. SIXIAN ZHU (SUCCI), 20132436 says:

    Labor, nowadays, is expected to turn to be knowledgeable from pure physical forces. Especially, managers who are white-collars and even golden-collars are required to equip with plenty of knowledge and experience. Knowledge is actually assembled infinitely through all sorts of costs, such as time, capital, self-energy, experience, and other resources, which leads to changes in the ways people think and behave. It enhances the possibility of effectiveness and efficiency, in particular, in manufacturing industry.
    Innovation is produced by intellectual assets. Organization structure affects creativity in some negative ways. Strict hierarchy prevents employees from suspecting, challenging, and critiquing their senior managers. Subordinates are more likely to follow instructions from supervisors in this kind of circumstance. No matter it is for respect or fear, staff in corporations that have long distance power may make themselves inefficient and unproductive.
    Lots of companies enter into finance sector trying to play a role in the game through different kinds of investments. However, most of them may fail. In other words, they may succeed as people expect. There is always a gap between rich and poor as well as between investors and entrepreneurs. Investors hold money but may be lack of systemic and comprehensive knowledge and strategic schemes. Entrepreneurs have advanced and creative ideas and plans but may short of capital to carry out their initiatives. Market should regulate and integrate them so that capital can be well used effectively.
    In addition, economic growth is never all about money only. Public common interests and social mutual benefits are supposed to consider. Corporate social responsibility and organizations’ and individuals’ ethics are also focused at this point. What is more, culture cultivation is emphasized at the same time. The advancement of the whole society and human’s well-being can solely demonstrate improvements that economic growth brings.

    • SIXIAN ZHU (SUCCI), 20132436 says:

      Made mistake on previous post. Going to make some corrections as below:

      Labor, nowadays, is expected to turn to be knowledgeable from pure physical forces. Especially, managers who are white-collars and even golden-collars are required to equip with plenty of knowledge and experience. Knowledge is actually assembled infinitely through all sorts of costs, such as time, capital, self-energy, experience, and other resources, which lead to changes in the ways in which people think and behave. It enhances the possibility of effectiveness and efficiency, in particular, in manufacturing industry.
      Innovation is produced by intellectual assets. Organization structure affects creativity in some way. Strict hierarchy prevents employees from suspecting, challenging, and critiquing their senior managers. Subordinates are more likely to follow instructions from supervisors in this kind of circumstance. No matter it is for respect or fear, staff in corporations that have long distance power may make themselves inefficient and unproductive.
      Lots of companies enter into finance sector trying to play a role in the game through different kinds of investments. However, most of them may not succeed as people expected. There is always a gap between rich and poor as well as between investors and entrepreneurs. Investors hold and chase money, but may be lack of systemic and comprehensive knowledge and strategic schemes. Entrepreneurs pursue advanced and creative ideas and plans, but may be short of capital to carry out their initiatives. Many venture investment companies formed in recent years trying to integrate those two stakeholders so that capital can be well used effectively.
      In addition, economic growth is never all about money only. Public common interests and social mutual benefits are supposed to consider. Corporate social responsibility and organizational and individuals’ ethics are also focused at this point. What is more, culture cultivation is emphasized at the same time. The advancement of the whole society and human’s wellbeing can solely demonstrate improvements that economic growth brings. I would say economic growth is like the appetizer, and social value creation is the main course.

      • Yes, I agree with you. Innovation is the key to success because it allows companies the match the changing market, and transition to a state of discontinuity. In fact, creative destruction is a concept that focuses on the development of new economics markets from the destruction of previous economic orders. It attempts to explain the way in which certain goods and processes are replaced with higher quality products, and more efficient production techniques. Thus, companies that fail to recognize and accommodate the new demands of evolving markets will ultimately become irrelevant.

  3. Tanya says:

    Until such time when the capitalists “unfreeze” from a mindset in which capital gain is the only measure of success, to one of incorporating a social component, it’s unlikely to happen on a large scale. Alternatively, we can take another approach and match capital with entrepreneurs through many socially/community-minded individuals with smaller amounts of capital. Take for example, the NS CEDIF model whereby millions of dollars is invested in local projects. If this program was scaled up in a big way, there could exist a potential to match entrepreneurs with the capital required to get their idea off the ground. So, rather than go for the big pockets of capitalist money, chase after the smaller pockets of individuals that are already carrying a different mindset around creating impact.

    • Lindsey MacIntosh says:

      Tanya,

      I liked where you were going, not to be undermining, but whom do we think we will need to go to to get money from to boost such initiatives? especially in a broke place like NS?

      • Tanya says:

        Fair comment, and I don’t disagree at all. My thinking certainly refers to smaller-scale investment. This still has the potential to put money into the hands of entrepreneurs. It is estimated that each year Cape Bretoners alone contribute $100 million to RRSPs – not bad for a significantly depleted community. A small start, but if it is scaled up (across many communities) it has potential to have larger impact.

  4. It is obvious that capitalism is a process of economic change and never can be stationary. Schumpeter’s theory means that entrepreneurship triggers creative destruction. The process of creative destruction ensure “churn” results from the innovations in new products, services and organizations which in turn create value, but inevitably displaces or diminishes the value of incumbent products, services and organizations. The results are progress and growth. Nowadays only companies which are innovation can survive in the market. To put it in other words we speak about qualitative change, which means the price is not the only competitive factor in the market. As an illustration we may think about the competitors Sony and Apple. Sony provides an example of the consequences if an origination lacks the sense of creative destruction. It was very successful and dominated the global market in the 1990s. However, it missed to recognize the true threat posed by Apple productions. Besides this fact, Sony needs to do their best in the competition and thus they optimize their production or establish new and more efficient organization forms.

    • SIXIAN ZHU (SUCCI), 20132436 says:

      Michael, I don’t know why I cannot reply the comment you left after my post. But, anyway. It is so interesting to see you mentioned creative destruction. Totally yes, old is inevitably replaced by new no matter how long it will take. Thus, knowledgeable and skilled labor ought to be emphasized; also, innovative social value creation cannot be ignored. If we take these into consideration, it is going to demonstrate incredibly different economy and society. Both public benefits and economic progress is equally significant, nowadays. They are supposed to regard and treat by the same weight.

    • Lingshan Meng (Helena) 20132781 says:

      Well, innovation is definitely an important factor for the competition in resent years. The development of technology, people’s imagination, and demand all require companies to improve innovation. However, innovation is not directly connected to social value. As Succi said, both corporations and entrepreneurs should not ignore the innovative social value creation. Social benefits can improve the common capitalism society, and innovation is just a tool.

  5. Lijuan Wang (vivian) #20142447 says:

    From this topic, we can know knowledge is very important issue to develop the economy. Moreover, keeping balance the type of liberal democratic system is a good way to adjust the pace of change. The standard to evaluate the success is accumulated shareholders value now, and all businesses ignored the social value issue. Actually, accumulating capital is not a good way to develop the economy. What should we do for helping grow the economy is Capitalists and Entrepreneurs work together and let more people get involved in the society and develop the economy. However, in reality, these two groups usually have totally different ideas because of totally different aim. Capitalists like to do what they want because they have enough money for spending. Because of this reason, they usually do not need consider other people’s feeling, not mention to consider some good way to let all of the people get involved in the society. Contrast with capitalists, entrepreneurs do their best to figure out the way to develop all society by creativities and innovations.

    • Yuting Yang#20142476 says:

      Exactly, entrepreneurs sometimes are always in a disadvantage position—on the one hand, they would like to improve the reputation of their company and create value returning to society; on the other hand, they have the pressure from capitalists because they are the people who offering the money. In my opinion, it is significant to spread ethical leadership towards entrepreneurs in order to help them resist the attractive of benefits. And it is also important to improve the ideological level of capitalists and make them aware that pursue the money blindly is not a good thing both to the society and to themselves. Because they also live in the same society as the public. Learn to give, they would attain beyond their imagine.

      • Chengcheng Zhong says:

        I totally agree with that. Unfortunately, capitalists do not care about society’s future, and focus mainly on their own profit. More unfortunately, the money are require to change for the benefit of the society is in their hand, very little amount of money is actually in the hands of entrepreneurs who trys to provide benefit for the community through innovation and creativity. Because they have different objectives, therefore sometimes collaborating with each other is difficult. Although accumulating capital is important for economic growth, but future development should be more important community development. From my perspective that If we can find a balance between those two, they may be able to provide more benefit for the society.

    • He Jingting student ID: 20140505 says:

      I agree that capitalists want to maximize their return while minimizing the complexity of their actual business; in a pure capitalist scenario, coordination, production and thus entrepreneurship is overhead. However, the entrepreneur is someone who organizes, manages, and assumes the risks of a business or enterprise. Furthermore, they can produce job opportunities, benefit the communities, promote the social economy. Therefore, the entrepreneurs can benefit for the community economic development; the capitalists also can devote to the community economic development, if they can help the entrepreneurs realize the social purpose.

  6. He Jingting student ID: 20140505 says:

    Knowledge is priceless assets, therefore, the entrepreneur is a vital role of the society. However, they have no money. The capitalists they have money.
    The entrepreneur is the person who holds a high position, in executives level of operation decision, take charge of the right of operation decision and get hold of on the entrepreneur’s risk in the business. The capitalist is an important equity financing resource that addresses the funding necessary of entrepreneurial businesses in particular in environments of uncertainty.
    So the relationship between the capitalist and entrepreneur are very significant, which make both of the mutually symbiotic, and trying their best to maximize the firm value. in addition, the positive relation raising the development of high growth businesses that create jobs and generate wealth that potential to contribute to the economy and community development.
    Therefore, it is only when the entrepreneur and capitalist interact in a cyclical manner that an economy grows, and provides for all members of society.

    • I totally agree with your idea, only the capitalists and entrepreneurs get together, then they may create the maximum social value. And also can improve the development of high growth businesses that create jobs and generate wealth that potential to contribute to the economic and community development. In the future, if we want the country have the sustainable development, like you said “the entrepreneur and capitalist should have the interaction in a cyclical manner that an economy grows and provides for all members of society”

      • Aiqun Shan says:

        I don’t think when business and capitalists get together, their goal is to create maximum social value, in my opinion, no matter what format capitalists get involved in a business, their goal is accumulating wealth. They might want to invest to improve the development of high growth business, however, their priority is still making money. The interaction between capitalists and entrepreneurs might be positive of the development of the society, but capitalists’ nature will never change.

    • ZIMING FENG says:

      The main target that capitaist and entrepreneur pursue is different. Capitalist pursues the capital and profit, while entrepreneur would like to achieve the social value. As the opinion of the article, interaction between capitalists and entreprenuer is a reasonable way to solve social problem and improve social development. However, according to the article, to change the mind is important. Capitalists are supposed to transfer some parts of their attention from capital pursuing to social contributing. And entrepreneur should also do some change in their mind because the capital is the main element for their business’ daily operation. As long as entrepreneur get development, they can do better for social mission.

      • Nada K. says:

        Ziming,

        I agree with you in a way! But how would you know if an enterprise has the intentions of providing social good to the society. A social enterprise with a main purpose of providing solutions to social problems is what makes a difference in the community. Let’s not talk about capitalism, because we all know what they want, capitalism = money to make more money. My point is that a social enterprise is what provides social good and has a clear purpose of helping out in solving social problems. So I think social entrepreneurship is the right term to be used.

    • Zhe Cao ( Mark) ID20140535 says:

      The idea of you and Schumpeter mentioned, are based on capitalists do not consider risk. Without consider risk, i totally agree with you opinion. Because the things they are pursuing is quite different. They have different goals. Capitalists are always seeking for profits. Entrepreneurs pursue making society better. The difference between rich and poor shows the reality.

  7. Yuting Yang#20142476 says:

    The objective of the company is to maximize the stockholders’ equity in order to realize its value. And it is well known that obtaining largest benefit with minimum cost is always what the companies seek for. We cannot deny that everyone is selfish and always want to pursue their own benefit–some people for money, some people for reputation, some people for the position of the society and so on. However, every human beings have conscience, which means they would pursue their benefit in a proper way and strictly obey their moral bottom line. So when a company is seeking for its benefits, it also have the responsibility to create value for society. Just like we cannot only maintain our human rights and ignore our duty because right and obligation are exist together. We live in a balance world which means what we obtain is equal to what we give. So the perfect state is the point that our input is equal to output. Nowadays, our world cannot live without the development of economic. It really create a plenty of advantages and convenience to us. As such an important role the business organizations play in our society, the entrepreneur has the responsibility to create value in order to pay back society. Capitalism has a lot of money to invest company for the sake of returning more money. So there is an inevitable divergence between the capitalism and entrepreneur because of their different goals. Entrepreneur want to create more good and services to society but they also have pressure from capitalism who has the source of money. And sometimes they would make a deal privately to deceive public in order for great benefits or sacrifice our environment for the growth of the economic. They all lose the principle of balance and would someday suffer the retribution.

  8. Peggy says:

    The first sentence in the book Offshoring reads, “Warren Buffet, sometimes described as the twentieth century’s most successful investor, recently maintained: ‘there is a class warfare, all right, but it’s my class, the rich class, that’s making war, and we’re winning.’ ” If that is true, which is evidenced from the growing gap between the rich and poor, then why is the rich class winning. The more I read and learn about the economic theory the more I believe it should be renamed social economic theory to underscore the primacy of the social.

    Social interests have been hammered with years of special interest lobbyists, corporate campaign funding and short vision 2 -3 year cycle governance. Successive governments focus on economic growth through business tax incentive programs and have decreased spending in areas of science and technology and R&D. Example: Big pharma has more decision making power for societies’ health than it’s jurisdictional governing body. More recently, I am frightful that our Canadian government is getting the notion that global acts of aggression is good business (taking lessons from the U.S.).

    So now to the individual. There is no ‘revolt of the masses’ because we are as individuals, sated in material wealth and an over abundance of pieces of knowledge devoid of critique and meaning. Example: Twitter – Hahaha. The speed of our world has increased so much that our neurobiology hasn’t been able to keep up so are faced with decision fatigue. (Yes, I believe there are parallels to increased rates of mental unwellness) As individuals we can engage in the social in many ways and when we do we will create mass. Mass matters!

  9. Nowadays, most of businesses ignored the social value issue. In fact, accumulating capital is not a good way to develop the economy. We should help the Capitalists and entrepreneurs work together to develop the economic growth and let more people get involved in the society and develop the economy. However, the truth is these two groups usually have totally different ideas because of totally different aim. Capitalists like to do what they want to do, because they have enough money to support them to do anything. Because of this reason, they usually do not need to consider others, not necessary to consider some good way to let all of the people get involved in the society. Contrast with capitalists, entrepreneurs do their best to figure out the way to improve all society by creativities and innovations. We should improve their aware, let Capitalists and entrepreneurs realized to develop and create social value is the sustainable way for developing society.

    • Yan Huang/Yadira/#20122952 says:

      I totally agree with your idea. Making capitalists and entrepreneurs work together will create a unlimited social value. Although in general, capitalists have enough money for spending so that they put their all attention on how make more money rather that provide goods and services. But in order to maintain and promote economic sustainability, creative ideas and sufficient capital should be combined, which not only increase society economy, but also generates a lot of job opportunities for local citizens, and achieve a real sense of self-reliance.

    • Jiaxuan Kang#20142783 says:

      Exactly. I firmly agree with your opinions. In fact, capitalists do whatever they want because they have money. In their mind, what the important is to maximize the profit and ignore their social responsibility, even though some of their approaches to make money may do harm to the society. In this way, entrepreneurs are standing at a weak position. They have ideas to make contribution to the whole society no matter on the aspect of money or other social wealth. However, because of the lack of money or control of the business, they can do little gradually. what need to be done is improve the sense of capitalists to dedicate to the social development and take the social value into account. Also, the balance between the capitalists and entrepreneurs also needs to be resolved.

    • Chen Liu 20142785 says:

      There are two ways to solve these issues.the first one is that the capitalist and entrepreneurs work together,it will help business to take more social responsibility,and give more develop chances to entrepreneurs to increase fund. In this method,they help each other ,and solve the problem effectively.On the one hand, the capitalist should increase their moral standard by taking some education course,and build up the own company culture for themselves,it can help them convert the profit goal to social purpose.For entrepreneurs,they can invest more and try to get more resources to earn more money ,use the operating fees more effectively,this strategy means they convert their goals a little bit to other side ,not only focus one aspect,the issues will be solved by themselves.

  10. Yan Huang/Yadira/#20122952 says:

    According to the Schumpeter’s theory, it is clearly to know that the accumulation of capital is not a sustainable approach for economic growth. Instead, the accumulation of knowledge is more important for economic development. Focusing on social value or providing goods and services is the necessary job for businesses. In particular, for shareholders, who possess a large number of money, are supposed to shift their attention from making money to creation and innovation. They should collaborate with entrepreneurs who have ideas, but no money, support and invest entrepreneurs’ creative idea for developing the economy. Although different groups of people have various objectives and the way they do, if they share the same vision of a sustainable economy, it is good for them to work together, make a term, as well as high efficiency.

    • Little Deng says:

      Yes, those who have money should work with entrepreneurs. However, if they don’t want to, what should entrepreneurs do? I think they should not hang all their hope on those shareholders. They should identify stakeholders who care about not only economic but also social value. Then, entrepreneurs can receive financial supports from stakeholders. This can be implemented through an appropriate company legal structure, such as worker cooperative. To an entrepreneur, legal structure is a mean to achieve his/her goal. Therefore, an entrepreneur should be innovative in terms of choosing a legal structure to meet his goal. If entrepreneurs manage to identify a group of stakeholders that have both money and passion for social benefits, entrepreneurs’ idea can be practiced out.

  11. Little Deng says:

    It is possible for entrepreneurs and capitalists to work together in a small scale or in some projects. However, I don’t think they can work in a large scale, at least in temporary, and the most important conflit between them is the rate of return of investment. In this respect, in long term, it is essential for entrepreneurs to initiate their financial institution that can provide financing with a lower require of interest. Then, entrepreneurs can work out their ideas.
    After initiating entrepreneurs’ financial institution, they also need to consider vertical integration as a strategy for long term development. This strategy can help them to create a cluster, which offers other entrepreneurs raw materials and has end customer group. With such a cluster, entrepreneurs can have better chance to weather external threats, such as financial crisis.

    • Chao Hu 20142781 says:

      Yes, you are right. In reality, capitalists and entrepreneurs have different features. When these two groups work together, the reason is that they have common objectives and interests. Capitalists can make better use of the money to support entrepreneurs’ ideas and realize them. If entrepreneurs can receive the financial supports, they can implement their innovations and creativities. In this situation, it can achieve the economic sustainability of society and increase the social values. In the future, the values will keep growing.

      • Euphemia Zhang says:

        Indeed, capitalists and social entrepreneurs can work together only when they have shared interests. Actually, in my opinion, common interests are not rare, they just need to realise them. Creating real value in the community is quite beneficial for businesses. However, the benefits are not always shown on financial reports. Therefore, not every business owner has the vision to do so. In fact, even in most depleted communities, businesses that can survive are those that had rooted deeply in the local economy, not those that created excellent numbers.

  12. Jiaxuan Kang#20142783 says:

    Generally, if capitalists do industrial investment, it is impossible to accumulate wealth so fast. Under normal circumstances, the rich has accumulated billions of assets within 20 year is impossible. There must contain legal and not illegal, proper and improper. Compared with the early English enclosure movement, during the transition from the traditional British feudal society to a modern capitalist society, there came out the phenomenon of instant riches. In the late 1980s and early 1990s, Eastern European countries with economies in transition period, the privatization process has also appeared this instant riches phenomenon making some people accumulate wealth quickly. In the process of traditional economy shift to a modern economic system, the transfer time of the social management system is lagging. And this shortage decides how many the riches are and how many the main factors that the capital has, which provides the social environment and conditions for the instant riches. The key distinction between the entrepreneur and the capitalist is to see whether they do the industrial investment or not. Entrepreneurs aim to product and improve service to achieve the goal and earn the reasonable profit. On this basis, entrepreneurs are socially responsible.

    • Yunshan Cui #20132434 says:

      I agree with your idea that capitalists focus on the short turn return, or to say, they believe that one penny in hand is better than two in other’s pocket. Money is the goal not the means for capitalists. On the contrary, entrepreneurs emphasize business ideas or things that beyond capital such as the social value behind it.

      • Julia Yusuf says:

        Then we can see that there may be a better chance for capitalists and entrepreneurs to work together when they both have a common social interest, or to say if they both share a social goal.

  13. Chao Hu 20142781 says:

    In recently, if the company insists on maintaining the status quo by using bail outs and subsidies, it will be less efficient and stalled or lost its real values. Therefore, the company should seek a creative way to thrive its business and increase values. For the theory of Joseph Schumpeter, the creative destruction of description whether the economy grow or not, which is suit for ingenious entrepreneurs who will accumulate more knowledge that can be achieved without limitations. It should change the previous and traditional situations to implement the creativities and adventures.
    The shareholder value is becoming more vital than social value in current business environment. Moreover, the capital cannot represent the true economic growth, which means that economic growth of society is ignored and the gap is huge between rich and poor. So how can we change this situation successfully? We should combine capitalists and entrepreneurs who are complementary. Although these two groups have different ideas and capital volume, only in this way, the economy will be developed and the social values are also increased. Take Apple Inc. as an instance, capitalists have a large amount of capital to invest the innovation of new technique, and entrepreneurs provide the thoughts to exploit the new products like IPhone 6 and 6-plus which are quite popular in society. It not only promote its own reputation and sales volume, also boost the ultimate economic growth of society.

    • Bozheng Wang # 20142463 says:

      I totally agree with you, Holly. In the vast majority of time, shareholder and stakeholder’s interests are considered in anytime. That is to say, when some talented entrepreneur operated the investing program, business project (they are managers of this project), they should consider their shareholder’s interests, in this case, they cannot totally control or dominate the tendency of those business. In other words, their blueprint cannot be totally achieving. So, how to resolve this question is really a pivotal point about this phenomenon.

    • Chen Liu 20142785 says:

      There are two ways to solve these issues.the first one is that the capitalist and entrepreneurs work together,it will help business to take more social responsibility,and give more develop chances to entrepreneurs to increase fund. In this method,they help each other ,and solve the problem effectively.On the one hand, the capitalist should increase their moral standard by taking some education course,and build up the own company culture for themselves,it can help them convert the profit goal to social purpose.For entrepreneurs,they can invest more and try to get more resources to earn more money ,use the operating fees more effectively,this strategy means they convert their goals a little bit to other side ,not only focus one aspect,the issues will be solved by themselves.

  14. Aiqun Shan says:

    Nowadays, business is mainly focusing on how to make money instead of showing their social value, as a result of this, the gap between rich and poor is increasing rapidly. However, this is the negative that we cannot avoid if we lived in a capitalism society. For capitalism focusing on the development of individuals not the community. In other word, capitalism is not aiming at even development. Due to the nature of capitalism, if businesses wants to change the situation, they have to acquire more knowledges other than just accumulate money.

    • Bozheng Wang # 20142463 says:

      As for this question, communication platform is the pivotal point. The following is to explain why I hold this opinion. Firstly, communication platform provides the opportunities for social entrepreneurs to show themselves, in turn, it also give a good investing opportunity to capitalists. Secondly, communication platform can create a sustainable communication channels. Thirdly, communication platform can make capitalists’ money to be more useful and valuable. Fourthly, unlocked communication platform can make information collecting more effective. In this case, what is the communication platform or what can be the communication platform. Personally, I think the enterprise exchange meeting,corporate seminar, Investment promotion meeting are both the good communication platform to help those capitalists to get a good investing idea.Besides, Considering the Human Factors, when a successful entrepreneur become a capitalist via his/her striving, this capitalist would like to broaden the communication channel.

    • Zhaojing Li says:

      Yes, I totally agree with you. Business today are is more about money than the society. Actually, the purpose of making money is to make our life become better. However, most people only think about themselves instead of considering about other people. The society is made up by people, so it is important to think about each other. This is where value comes from. Economic growth does not mean we are really getting better. The difference between rich and poor shows the reality. The progress made by the whole is the real value of the society. Due to the nature of capitalists, which is making money for individuals, more knowledge may change the current situation.

  15. Yunshan Cui #20132434 says:

    The radical reason why capitalists cannot interact with entrepreneurs is that these two groups have different goals. In other words, the things they are pursuing is quite different. In my understanding, the goal of capitalists is very pure and straight forward, it is all about money. Instead of beings the means that can help them fulfill their wills, money is their ultimate wills. However, for entrepreneurs, their goals are mixed.They do not require for capital accumulation, they also emphasize on different things based on different contents. Money for them is not the ultimate goal for them but the method for them to achieve success. The definition of success may vary from social well-beings to individual realizations but one thing can be sure: it is not just all about money.

    • Lei Ji says:

      I agree with your opinion, capitalists and entrepreneurs are different. They have different goals.
      Capitalists are always seeking for profits. Entrepreneurs pursue their dreams, hobbies and interests. The motivation of them is to produce something new or supply better services. Dreams encourage entrepreneurs to research and develop. Maybe someday, when they get success, they might be changed to be a capitalists. But, they have ever pursued and produced something.

  16. Hanqi Zhou says:

    ” Capitalists have money, but no ideas. Entrepreneurs have ideas, but no money”. In my opinion, the situation in this sentence happened in the past. In today’s society, majority Capitalists will have idea in the community even though their puopose is also to increase profits. For instance, Bill Gates hand his wife Melinda have donated more than 24 billion US dollars to establish a fund to support charities in the global healthcare and education , and hope that as mankind enters the 21st century , the scientific and technological progress in key areas to make mankind will benefit. To date, the fund Gates and his wife Melinda Gates has established more than 25 billion dollars to the cause of the health of the world, more than 1.4 billion US dollars will be used to improve people’s learning conditions, including the Gates Library Museum purchase of computer equipment to provide Internet training and Internet access services for the public libraries in the United States and Canada, low-income communities . In addition to more than 260 million US dollars for community projects in the Pacific Northwest , more than 380 million US dollars will be spent on special projects and annual gift payment activities. All ideas above was coming from Capitalists

  17. Lingshan Meng (Helena) 20132781 says:

    I agree with Schumpeter. Economic and corporation growth are not just the growth of money and profit. Just as the business world tend to think more about the community economic development instead of economic development.
    “Few people can handle large amounts of money without being corrupted by its.” Says Joel Solomon, Chairman of Renewal Funds, Canada’s largest social venture capital firm. “Love,” he says, “is the real currency” for social change. We have to take responsibility for the way our money is used, including especially when it is invested.”
    Just as Solomon says, how to use the money to benefit both shareholders and society is the main point. Having entrepreneurs and capitalists working together is a very good idea. Nowadays, there are many entrepreneurship incubation centers to help new entrepreneurs find good financial investment from the capitalists. However, if the whole argument in this article is to be true, those new entrepreneurs should have ideas with social responsibility. Traditional entrepreneurs who focus on the economic growth as capitalists do will not help change the current situation.

  18. Nada K. says:

    The turbo capitalism should not be the mindset! money is not always the key factor for success, it was mentioned in an article that a successful business; is a business with a purpose. it has to be innovative in addressing the consumer needs. Entrepreneurship is what brings the innovation and creativity, but again this is not enough to bring out an output, it needs money. So Capitalism and entrepreneurship together make a successful business.

  19. Lei Ji says:

    I totally agree with Joseph Schumpeter’s idea. Also, “ business has become less and less about providing goods and services, and more and more about using money to make money, through a variety of complex investment mechanisms” this sentence shows what I have thought in recnt years. More and more companies focus on investment mechanisms. They ignore goods and services. The stock should not be the main part of the economy. If companies just focus on how to increase the price of stocks, the economy will go to the end. Some cities rely on financial system. Such as London and New York. The Wall Street bubbles stock market. When bubble is bursting, nothing will be left.

  20. Julia Yusuf says:

    Entrepreneurs are different from capitalists in many ways. First of all, they take different types of risks. Capitalists take financial risks whereas entrepreneurs take a risk of making change (eg: a new product). Secondly, entrepreneurs and capitalists are different in terms of motivation. The motivation for entrepreneurs is not profit but rather, is the achievement from making new or better products. However, for capitalists, motivation is the money. Based on these differences, it is for sure that they should work together. However, it is not sure that if they can…

  21. Zhaojing Li says:

    It is a good idea to associate capitalists and entrepreneurs together. In fact, the reason why these two groups are not link to each other is because they have different goals. Capitalists are aiming at making money, while entrepreneurs committed to achieve the social goal. Value does not only mean the economic growth, but also includes the social well-being. Entrepreneurs’ goal is more about this part. Due to the purpose of the entrepreneurs’ is more about the society, the way they making money may not be so successful compared with those capitalists. Therefore, I think associating these two groups together is a good way to accomplish both the economic and social goal.

    • Shiyu Wu (Stephanie) says:

      I do not quite agree that capitalists and entrepreneurs have different goals. The main goal of the two group is to make money. What makes their current behaviours to be different is that capitalists have money while entrepreneurs do not. Entrepreneurs cannot make money without money.

  22. Binpeng Li 20142473 says:

    Why aren’t we doing this? Perhaps, we can ask another question, why should the Capitalists give money to support the Entrepreneurs’s ideas? For those capitalists, they simply just do not need to do this. For the capitalists, they already have accumulated a large amount of capitals; even when they want to make more money, there are many good ways and safe ways to do this, like the article highlighted, use money to make money. While for supporting the entrepreneurs’ ideas, no one can guarantee their ideas will work, or how much return can the capitalists get if they decide to invest.. One golden rule in investing is to reduce or avoid risks, surely, for the capitalists, actions such as supporting entrepreneurs’ ideas do not fit this principle. Certainly, in the text, the images of capitalists and entrepreneurs have been generalized; in reality, there are, of course,capitalists who invest in entrepreneurs’s project. However, I would doubt that for majority of the capitalists, their goals for such investments are to support growth of the economy but to gain more profits. Overall, I guess the issue between capitalists and entrepreneurs is difficult to solve, simply because these two groups have different interests and goals.

  23. Shiyu Wu (Stephanie) says:

    Making money through using money is more and more popular. Shareholders’ value determines the success of the company while the social value and responsibility are largely ignored. The distance between rich and poor increases. According to Schumpeter, although rich people get richer, they do not have thoughts. In the other side, entrepreneurs having views do not own money. Therefore, an awareness should be built that money is not everything. Rich people should improve and strengthen themselves instead of just focusing on make money. They should reduce the speed of making money. Besides, they also can find some talent entrepreneurs and support them to develop their business. In a world, people should enhance their social value and responsibility.

    • Binpeng Li 20142473 says:

      As I quote your comments” an awareness should be built that money is not everything. Rich people should improve and strengthen themselves instead of just focusing on make money.” I do not know how to make the capitalist think like this. I guess for some capitalists, they believe they could strengthen themselves simply by gaining more money; certainly money is not everything, but if you are rich enough, money can buy you a lot things. Also, you said “They should reduce the speed of making money”, well, I do not know if this is possible to achieve; and I doubt many capitalists would do this on purpose. If you really want to give a suggestion to solve the “capitalists do not invest on Entrepreneurs” problem, I guess, maybe, the answer lies on the entrepreneurs’ side. Since the capitalists are so rich and powerful, it would be difficult to make them to change. Therefore, the entrepreneurs may need to change themselves to convince the capitalists thus to attract possible investments.

  24. Chen Liu 20142785 says:

    Nowadays, the an increasing number of cooperation are only for profit,the objective of them is to increase its profit as much as possible.Their goal is to maximum the profit ,if the company only focus on profit ,they might concern the cost ,they have to lower the cost by milking employees and decreasing the quality of product and service .The have money and do not have clearly social responsibility ,do not contribute a lot to community and society .Compare to entrepreneurs ,they have the social values ,and make the differences to the society .They have their own weakness which is lack of operating fees .It means they have the social idea and take the responsible for society ,but do not have enough money .The business is opposite aspect from entrepreneurs ,they have money without social contribution .In this situation capitalists and entrepreneurs should work together and help each other, it will improve the efficiency of production and contribute more to the whole society ,they cooperate together , capitalists will absorb the social idea of entrepreneurs and entrepreneurs will have enough funds ,that is the win-win strategy.

    • Zhichao Yang says:

      Cooperation is necessary to economy development which has great positive influence on both business itself and local community. It is hard for any person to make profit for the sake of community and gain a sum of money for hiself or herself at the same time when run private business. For one thing, if capitalists pay more attention to public welfare, it is almost impossible to gain a great amount of capital.

  25. ZIMING FENG says:

    In my opinion, there is no mistake that an enterprise pursue to maximize profit and revenue in terms of the nature of the private sector is to run with the intention of pursuing profit, the more the better. In addition, according to the Friedman’ thought that the purpose of a business is to pursue profits and maximize shareholders’ interests. However, the phenomenon of rich-poor gap is becoming more serious because of uneven resources distribution. The rich company or entity definitely has more resources, and they will become richer due to the fact that they can use resources to create earnings. In my opinion, there will be three approaches which might solve this social problem. Firstly, encouraging enterprises to improve their corporate social responsibility to fix the problem. Secondly, promoting social economy (social enterprise) whose main target is to achieve the social mission. The third one, I think it is hard to accomplish, the government issue policys and regulations to compulsorily re-distribute resources.

    • Qiwei Zhang 20140465 says:

      Very good comments and inplementations. Social economy can be really the only way to challenge the way the world is running now. I would like to live older such as 50 years more to witness what would happened in the future. Inevitably, the world has to suffer serious sabotage to reach next stage and probably, very destructive, who knows.

  26. Qiwei Zhang 20140465 says:

    the reason why the world is not running in this way I think is because of the unbalanced power holding by capital owner and enterprise owner. Or in many cases, decisions are heavily influenced by capital. As a company, “going to public” rule is quite bad where it enhances the difference between individual investor and monster capital holders. However this process, in a economic way can be stated as: share the future profits and responsibility to the public which is a democratic way and productive way running a enterprise. We see many things those powerful financial groups trying to hide here is, by holding capital, they have access to control massive thing in the world.

  27. Zhe Cao ( Mark) ID20140535 says:

    Author points that to use human and material rescources to increase the values of outputs. Based on author’s analysis, I think the way works for enterprises even countries. Capitalists are able to share capital with enterprises and individual . And enterprises and individual can share their ideas with capitalists. This is a way to achieve growth and self-value. Just like author siad, a positive relationship is able to raise the development of gorwth business, and creat wealth of community.
    However, I think author ignored the risk. Capitalists do anything about investment, are based on risk. On the other hand, the objective of enterprises is to make the society better. And they can provide jobs for people. Therefore, I think that although author has a good imagine of the value share of capitalists and enterprises, this way probably does not work. Beacuse the target of capitalists and enterprises are different. One is to achieve capital and profit maximum. The other one is to make the society better.

  28. Zhichao Yang says:

    Knowledge is so important for making money. In information age, it is almost impossible to always reply on labor or materials to earn a sum of money. It does not mean they are essential, but the way of operating business plays a key role. Since, the materials may be used to create profits may be limited by some factors. While, the creative ideas or knowledge cannot by restricted. A lot of cases show that bosses suffer from bankrupty because of lack of management kills or related knowledge even though they have many employees and stuff. Therefore, it is of great importance to put knowledge when create value of outputs. Richer become richer may not always depends on more available materials, but owing to their knowledge.

  29. Chengcheng Zhong says:

    Capotalists and entrepreneurs carry totally different ideas of where the money should go towards. So unless the entrepreneurs can come up with a way to accumulate wealth and get society involved with it. There never will be a true and equal relationship between the capitalists and entrepreneurs. Then there is also a possibility of educating a capitalist so that the knowledge will effect the future decisions that she/he will make. It might not be able to overturn 100% the ideas of the past, but at least some decisions can be changed.

  30. Euphemia Zhang says:

    I had a whirlpool of emotions when I was reading about the negative impact that conservative decisions, such as bailout and subsidies, can bring to the industry and economy because the community I’m living in was put into the exact situation. Cape Breton is a good example of this argument. The subsidies for DEVCO not only burdened Cape Breton economy but also became a barrier to new investment across Nova Scotia. In 1999, the government decided to close the coal mines eventually. However, the community had already suffered poverty and health issues for decades and had missed the opportunities to make positive changes. I kept wondering: if the decision maker understood this argument back then, would they make a different choice?

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