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The Entrepreneurial Life

The Entrepreneurial Life

8 Mins
December 18, 1994

Five years after the fall of communism, the people of Eastern Europe enjoy more freedom than they have known for decades. In most countries, despite the enormous economic problems in moving to a capitalist economy, their material standards of living have increased as well. But reports from those countries make it clear that they face significant problems arising from the values and psychological habits instilled by life under totalitarianism.

According to a recent New York Times article [Oct. 7, 1994] on trends in the former communist nations of Eastern Europe, “American Airlines says it has taken 18 months to train the ground staff at Warsaw airport to Western levels of low absenteeism, no drinking on the job and service with a smile. A concept that was hard to get across, said Frank R. Van Zanden, an American Airlines manager, was the reason to be pleasant instead of surly to customers. ‘We had to explain again and again that passengers weren’t doing us a favor by flying—that the money passengers spent on tickets paid for staff salaries.’”

According to polls conducted by the Times in a number of former Communist countries, “Overwhelming majorities said that a secure job was far more important to them now than the freedom to travel or the richness of consumer choice that they have enjoyed since Communism collapsed.” The necessity of looking for work in a market economy, and the real prospect of unemployment, have even bred nostalgia for the days of socialist rule. Jan Rusin, an unemployed Polish coal miner, said, “I never thought there’d be such unemployment. All the years before 1989 were great. We didn’t have to worry about a job.”

In eastern Germany, the annual number of marriages per 1,000 people fell 62 percent between 1989 and 1992, and the annual birth rate has declined precipitously, from 12.9 to 5.1 per 1,000 women, a drop more severe than Germany experienced in the last days of World War II, as German society headed toward collapse. The total fertility rate, a complex calculation demographers use to track births per woman over a lifetime, is the lowest ever measured for a large population. According to demographer Nicholas Eberstadt, these data “would appear to register a profound and broadly felt lack of confidence in the economic future.” But why should eastern Germans be economically anxious, when wages and disposable income have doubled since 1989, and $100 billion per year has been infused from western Germany?


Like the other items mentioned above, the demographic data point, not to economic problems, but to a kind of psychological trauma: the trauma of people who must now take responsibility for their lives after living for decades in a political environment that made it impossible. Jirina Siklova, a sociologist at Charles University in Prague, told the Times that five years is too short a time for people to recover. “‘They have changed the content of their thought, but the form of thinking is the same. They would like someone else to make the decisions on their behalf.’”

Joachim Gauck, a Lutheran clergyman, predicted that it would take two generations for easteners to recover psychologically from the effects of life under repressive rule. “‘You have to remember that people here lived under dictatorship without interruption for almost 60 years,’ Mr. Gauck said. ‘That experience turns people into subjects. It destroys their sense of what it means to be a citizen, an active participant in life and society. Only a minority of people in eastern Germany understand what it is to design and be responsible for their own future.’”

The kind of responsibility to which Mr. Glauck is referring goes much deeper than the conventional concept of responsible behavior. It involves what I would describe as an entrepreneurial attitude toward one’s life. This attitude is in part a sense of self-ownership, a conviction that one’s life is one’s own, not something for which one must answer to some higher power. In part, it is a willingness to set the terms of one’s life—to form convictions, to choose goals and values, and to make decisions—by one’s own judgment, without dependence on others. And in part it is a spirit of self-reliance, initiative, and alertness to opportunity, a belief that life is what you make of it.

People like that can’t be ruled; they don’t like to cede control over their lives. Just as a collectivist economy eliminates actual entrepreneurs, the culture of collectivism, with its demands for sacrifice, consensus, and solidarity, is designed to exterminate the entrepreneurial outlook on life. It is only in a free society that the entrepreneurial outlook can exist among any significant part of the populace. And it is becoming increasingly clear—from trends in the West as well as the East—that the converse is also true: a free society requires that outlook. It is not merely an option; it is a vital part of the psychological equipment one needs in order to succeed and flourish in a condition of freedom.


To understand this connection, it is important to distinguish two levels of responsibility. It is possible to behave responsibly in the conventional sense without having the deeper level of responsibility implied by the entrepreneurial outlook on life. There are many people who apply themselves in school, who work hard to support themselves and their families, who keep their promises and pay their debts, who obey the law and stay out of trouble—but who do all this out of a sense of duty. Those are the rules, they feel. Why should we follow the rules? Because they’re the rules. We might call this the managerial outlook: a view of one’s life as a franchise one has been given, to be operated in accordance with rules issued by the main office, with the expectation of rewards for going by the book.

At its best, a society in which this sort of managerial responsibility is the norm may be peaceful and productive, to a degree. There are worse places to live. But that’s possible only in a condition of cultural and economic stability. Cultural stability is required because rules not based on reason—rules based on custom, tradition, or religious faith—cannot survive a challenge from rival ideas. They cannot maintain themselves by argument or persuasion; their status as rules of behavior depends on their being widely accepted and taken for granted.

Economic stability is required because rules not based on reason can be applied only in familiar circumstances. When conditions change, a person who understands the reasons for his principles can ask if the principles still apply, and, if they do, he can identify the implications of those principles for the new situation. But someone who guides his actions by a set of concrete duties is not capable of such flexible adjustment. He can only observe that things aren’t working the way they used to. He may stick doggedly by the old rules, and grumble that life isn’t fair. He may search for someone to give him a new set of rules. Or he may abandon rules altogether, living by whim in pursuit of range-of-the-moment pleasure or profit.

This is precisely what has happened in Western societies over the last several decades. The so-called “bourgeois ethic,” which emphasized the virtues of hard work, thrift, and honesty, and which was a dominant ethic until the 1960s, had come to be taught and practiced as a set of duties. But it was severely eroded by the cultural challenges of that decade, which advocated emotionalism over reason and the pursuit of gratification NOW.


Many conservative commentators have blamed the subjectivism of the 1960s for the palpable flight from responsibility we see all around us: crime in the streets and cheating in the schools, welfare mothers having children they cannot support, drug addicts using disability payments from the government to support their habit, lawsuits brought by “victims” demanding compensation for the results of their own stupidity, negligence, or misfortune. I believe the conservatives are right in their analysis. But their prescription for bringing responsibility back—a return to religion and traditional values—is not only objectionable on moral grounds, as a repudiation of reason. It is no longer possible. These nonrational bases for accepting rules depend on widespread consensus about values. That consensus cannot be willed into existence, certainly not in a society as diverse as that of the United States.

But even if such consensus were possible, it could at best sustain a duty-bound, managerial sense of responsibility, and that would not be enough to meet the challenges of economic change.

During the 1980s, global trade put downward pressure on the wages of blue-collar manufacturing workers, whose employers could no longer guarantee ever-rising wages in the face of competition from abroad. Corporations were restructured by a wave of mergers, acquisitions, and buyouts; corporate hierarchies were flattened, ending the career paths of many middle managers. During the 1992 presidential campaign, Bill Clinton said that these were the people who “worked hard and played by the rules” but were unfairly excluded from the gains of the 1980s.

What “rules” was he referring to? In a market economy, the only economic rules are those which limit one to voluntary exchange: by respecting property rights and keeping contracts. There can be no “rule” that one’s job—or even the company one works for—will exist forever. There can be no “rule” that a job in the mills will always provide a middle class income. Clinton was playing to a managerial conception of responsibility, as was Labor Secretary Reich when he complained recently that “there is no job security in America.”

The managerial outlook is reflected in the attitude: “My job is to do my job; the employer’s job is to ensure that my paycheck will always be there. They make the rules—who knows how or why?—and as long as I obey them I should be rewarded.” Like the American Airlines workers at Warsaw airport, this outlook is only dimly aware that the paycheck depends on customers willing to buy the company’s product. The managerial outlook, with its concrete-bound conception of responsibility, tends to view long-established practices and expectations as entitlements. It is willing to give “an honest day’s work for an honest day’s pay,” but it expects someone—if not the corporation, then the government—to guarantee protection against economic risks such as unemployment and disability. Like the frightened citizens of eastern Europe (but with less excuse), it regards security as a right, not an achievement.


Those who have an entrepreneurial outlook on life are aware that to live by trade with others, they must not only produce something of value; they must also accept, as facts of reality, both the value judgments that others place on their product and the larger economic forces that arise from the interplay of supply and demand. They are aware that change and its attendant risks are a fact of life, that no one and no institution can eliminate that fact, and that they are responsible for insuring themselves against economic risks. An entrepreneurial outlook does not require that one actually be an entrepreneur. It does require that if one works for a company, one must regard the relationship as a trade, a sale of one’s time and talent; and one must recognize that that trade is possible only if a market exists for the company’s product. “The only thing you can rely on,” observed Andrew Grove, CEO of Intel, in a recent interview with the Wall Street Journal, “is your ability to end up where the invisible hand of the market wants you to be. Our phrase for it is ‘owning your own employability.’” That awkward phrase expresses an essential element in the entrepreneurial sense of self-ownership.

Corporations are swiftly moving away from the top-down command structures that tend to encourage the managerial attitude. They are introducing market relationships within the firm, and trying to make employees sensitive to the external market in which the firm exists. Success in this new environment will require an entrepreneurial outlook. It will require the kind of independence and initiative that come from viewing oneself as the owner of one’s life, responsible for setting its terms and direction. It will require the kind of cognitive independence and initiative that come from a commitment to reason.

But this level of personal responsibility cannot be taught in the form of duty. By its very nature, it cannot be taught as a set of rules to be obeyed, or as a sacrifice to be made for the sake of a later reward. It can only be taught in the form of principles—moral principles—that recognize the individual’s own life and happiness as his highest values, and his own mind as his only guide to action. That lesson, the essence of the Objectivist ethics, is just as important for America and other Western nations as it is for the victims of communism.

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
Values and Morals