Entrepreneurism is the most creative -- and revolutionary -- activity in the American economy. Most politicians would just as soon do without it.
Entrepreneurship is the wonder word of this political year. Across the country and around the world -- from Deng Xiaoping in China to Francois Mitterrand in France, from Robert Dole to Walter Mondale in the United States -- politicians who never before seemed to care are modishly celebrating the entrepreneur. In American electioneering, he turns out to be a marvelous fellow: glamorously high-tech in his products yet fetchingly gullible in his politics, cheaply susceptible to campaign pandering yet (unlike so many constituencies) richly rewarding as a campaign contributor. Altogether a great political asset. Plug him into a speech on the American dream. Key him into the computer for a "highly confidential, personalized" fundraising letter: "Dear Mr. Gilda, Like so many entrepreneurs in the Tyringham area . . . "
A few entrepreneurs with free time are responding eagerly to their eminent new suitors. They should be more cautious. There is a lot of hokum in the halo that politicians are looping, like a lasoo, around the head of the entrepreneur. Most politicians envy and disdain businesspeople, and understandably so. The samples they see in Washington tend to be the worst representatives of every industry, people who have given up the fight and are calling in the Feds. The District is crawling with these figures: over-the-hill self-promotors, fast-buck finaglers of special legislation, protectionist whiners and diners, rapid write-off Mercedes-Benz salespeople, affirmative-action anglers -- all racing one another for a parking slot for the handicapped outside the halls of Congress. Closer to home, in his own profession, what does the politician see? He sees his real estate broker spouse win twice his own salary by going to the right parties; he sees an ex-Cabinet official like Joseph Califano earn around $500,000 in one year as a lawyer-lobbyist; he learns that Sen. Howard Metzenbaum (D-Ohio) could be paid $250,000 for a single well-placed telephone call. No wonder the Washington pol soon comes to understand the private sector as a carnival of influence-mongering and free rides, fast shuffles and sub rosa bribes -- and soon dreams of electoral defeat when he, too, can open an influence boutique on Pennsylvania Avenue.
But in all this dubious commerce, the politician rarely meets a real entrepreneur. How could he? Real entrepreneurs are mostly too busy.
Thomas J. Fatjo Jr., for example, a real entrepreneur, never thought of calling a politician when he got into a jam one day early in his career. Besides which it was before dawn, in Houston, and hardly anyone was awake. Fatjo, however, was up to his armpits in garbage. It had abruptly given way under his feet when he tried to stomp the stuff into the back of his truck. The compactor had broken, and he had 70 houses on his collection route still to go. What else could he do but get down into the muck and pack it himself?
Now, it happens that Thomas J. Fatjo combined a number of qualities not normally found in novice garbagemen. He was young, ambitious, and a certified public accountant. More surprising, he saw high opportunities in garbage. Day after day, drowsy on his predawn route, he was elaborating the notion of a national company. And as time passed, out of his leap into the garbage business came a hypothesis, out of the hypothesis came a plan, and out of the plan came the largest solid-waste disposal company in the world. Called Browning Ferris Industries Inc., it earned $800 million in sales in 1983, was listed on the New York Stock Exchange, and commanded units in most of the nation's cities.
Several things are important about this success story, none of which is very well understood by political elites. The first is that Fatjo should have failed. In fact, more than once in the course of building his company he skirted mental and financial breakdown. There was no evident demand anywhere for a national garbage company when he started up. There was no "rational" demand for one: no apparent economies of scale or marketing. Garbage collection seemed an inherently fragmented field that any business-school analyst would have relegated to the attentions of small local companies.
Established elites, most of them, are loud in their praises of a success like Fatjo's. But what they seldom appreciate is that the entrepreneurial act, like his, is fundamentally a rebellion against existing companies or institutions and the political constituencies that support them. The entrepreneurial start-up is the most creative activity in the American economy -- probably in American life -- but also the most revolutionary. It is tumultuous, upsetting, disturbing -- and if it were none of these, it wouldn't be creative. Political elites, if they understand this, fear it.
Furthermore, revolutions like Fatjo's almost always begin at the bottom, far from the windy plateaus of statecraft where political elites are wont to graze. From the the fetid bins of creativity, from the "skunk works" of a machine-tool company or the diffusion ovens of a semiconductor plant, an entrepreneur rises up with a sure sense of the physical nature of his business. Only in this way can he face down all the book learning and statistical tables of the established experts, all the fast talk from the financial centers, with the unimpeachable knowledge of his own hands and eyes. Starting at the bottom of a new industry, he doesn't have to climb to the top. He can become the top, raised there by the upheaval of his own success.
All this is largely hidden from our political leaders. Their view is of something called "the economy," an abstract model laboriously constructed by experts called "economists." They are mesmerizing, these models, undulating with the smooth rise of aggregate numbers, the slow accumulation of physical capital, the systematic exploitation of land and labor, and the gradual expansion of scientific knowledge. Within the model the economy is, at any given moment, a problem with a small number of possible solutions -- limited by tastes, technologies, and natural resources -- which can be expressed as a set of simultaneous equations.
