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How Valid an Analogy?

How Valid an Analogy?

3 Mins
May 30, 2011

Sidebar to Life: Your Adventure in Entrepreneurship

Summer 2009 -- Analogies, like fire, are useful servants but dangerous masters. Is the analogy with entrepreneurs a useful guide to the ethics and spirit of rational individualism? Does it go too far? Does it mistakenly erect a specific personality type and mode of life as a general standard for all people?

As Roger Donway notes in “Entrepreneurship: Is Life Like That?” the distinguishing economic role of an entrepreneur is to make decisions for an enterprise and bear the primary risk for the outcome of those decisions. Entrepreneurs may introduce new products and services, new methods of production, or new ways to cross the boundaries between markets through arbitrage. The essence is the attempt to do something new, and that necessarily carries a heightened degree of uncertainty, with the double-edged potential for large gains and large losses. Not everyone has the creative ability to innovate, or tolerance for risk, that are required for entrepreneurial success.

There is also a growing literature on the traits of entrepreneurs, the result of research by business analysts and psychologists. The most frequently mentioned traits fall naturally into the categories I highlighted in my own analysis: the pursuit of goals, self-ownership and self-esteem, and reliance on one’s own judgment.

Some of the traits in each category (see above chart) are matters of personality, preference, or skill rather than character; and to that extent are not moral virtues that can be expected of everyone. People differ in risk tolerance, patience, and intensity of focus on a single goal. They differ in skills of creativity and judgment. Yet all of these are specific forms and embodiments of traits that are virtues: productiveness and responsibility, pride, and rationality. Risk, for example, is a fact of life from which no one is exempt. Accepting that fact and dealing with it rationally—including, as Donway notes, the exercise of caution and prudence—is a universal requirement of life. Indeed, if entrepreneurs tend to have an unusually high tolerance for risk, they also tend to be skilled in estimating the odds, putting safeguards in place, and other forms of caution.

Competitiveness is perhaps an exception to the general rule. Entrepreneurs do tend to be fiercely competitive, and for some, no doubt, beating a competitor is more important than creating value. That is not a virtue. Defining one’s ultimate goal in terms of others bespeaks a lack of independence. Yet competition, like risk, is a fact of life. Indeed, it is a particular type of risk arising from the freedom of others to pursue their own goals, and it arises in all areas of life, from rivals for the affections of a romantic partner, to theories competing for mind-share in the marketplace of ideas, to the long-running battle of Coke vs. Pepsi. In this respect, I question Donway’s objection that “life is not inherently competitive, as entrepreneurship is.” As Donway himself has observed elsewhere, competition and cooperation are normally two sides of the same coin:

… we can see how intensely sociable [freedom] is. The idea that liberty is based on a competition for survival becomes ludicrous. Liberty is based on cooperation for survival.

Even the specific economic phenomenon of competition exhibits this cooperativeness. For economic competition is essentially the struggle to be chosen as a trading partner. And, as trade is mutually beneficial, economic competition is thus essentially a competition to cooperate. It is a struggle to reach what is mutually beneficial. (Roger Donway, “Living Together,” The Freeman, April 1978)

David Kelley


David Kelley

David Kelley is the founder of The Atlas Society. A professional philosopher, teacher, and best-selling author, he has been a leading proponent of Objectivism for more than 25 years.

David Kelley Ph.D
About the author:
David Kelley Ph.D

David Kelley founded The Atlas Society (TAS) in 1990 and served as Executive Director through 2016. In addition, as Chief Intellectual Officer, he was responsible for overseeing the content produced by the organization: articles, videos, talks at conferences, etc.. Retired from TAS in 2018, he remains active in TAS projects and continues to serve on the Board of Trustees.

Kelley is a professional philosopher, teacher, and writer. After earning a Ph.D. in philosophy from Princeton University in 1975, he joined the philosophy department of Vassar College, where he taught a wide variety of courses at all levels. He has also taught philosophy at Brandeis University and lectured frequently on other campuses.

Kelley's philosophical writings include original works in ethics, epistemology, and politics, many of them developing Objectivist ideas in new depth and new directions. He is the author of The Evidence of the Senses, a treatise in epistemology; Truth and Toleration in Objectivism, on issues in the Objectivist movement; Unrugged Individualism: The Selfish Basis of Benevolence; and The Art of Reasoning, a widely used textbook for introductory logic, now in its 5th edition.

Kelley has lectured and published on a wide range of political and cultural topics. His articles on social issues and public policy have appeared in Harpers, The Sciences, Reason, Harvard Business Review, The Freeman, On Principle, and elsewhere. During the 1980s, he wrote frequently for Barrons Financial and Business Magazine on such issues as egalitarianism, immigration, minimum wage laws, and Social Security.

His book A Life of One’s Own: Individual Rights and the Welfare State is a critique of the moral premises of the welfare state and defense of private alternatives that preserve individual autonomy, responsibility, and dignity. His appearance on John Stossel’s ABC/TV special "Greed" in 1998 stirred a national debate on the ethics of capitalism.

An internationally-recognized expert on Objectivism, he has lectured widely on Ayn Rand, her ideas, and her works. He was a consultant to the film adaptation of Atlas Shrugged, and editor of Atlas Shrugged: The Novel, the Films, the Philosophy.


Major Work (selected):

Concepts and Natures: A Commentary on The Realist Turn (by Douglas B. Rasmussen and Douglas J. Den Uyl),” Reason Papers 42, no. 1, (Summer 2021); This review of a recent book includes a deep dive into the ontology and epistemology of concepts.

The Foundations of Knowledge. Six lectures on the Objectivist epistemology.

The Primacy of Existence” and “The Epistemology of Perception,” The Jefferson School, San Diego, July 1985

Universals and Induction,” two lectures at GKRH conferences, Dallas and Ann Arbor, March 1989

Skepticism,” York University, Toronto, 1987

The Nature of Free Will,” two lectures at The Portland Institute, October 1986

The Party of Modernity,” Cato Policy Report, May/June 2003;and Navigator, Nov 2003; A widely cited article on the cultural divisions among pre-modern, modern (Enlightenment) and postmodern views.

"I Don't Have To" (IOS Journal, Volume 6, Number 1, April 1996) and “I Can and I Will” (The New Individualist, Fall/Winter 2011); Companion pieces on making real the control we have over our lives as individuals.

Ideas and Ideologies