10. Entrepreneurs and Capitalists COMMENTS Gareth Austin 21/11/2012

Capitalists and the State State as obstacle to private sector? State as facilitator of private sector? Infant industries Overcoming coordination problems State captured by private sector? Overlap between capitalists and officials/politicians? State assisted by private sector? State champions domestic v foreign firms? Or the opposite? Debate on this for Kenya in 1970s

State as promoter of capitalist class E.g. South Africa under apartheid and since apartheid

Capitalists as a class: consider 2 Dependency theory stereotypes Capitalists as ruling elites in western countries, driving policy (but how far was/is that true?) Capitalists in developing countries as “mere” “compradors”? Neither stereotype works particularly well, but the question is important: political influence of capitalists (business)?

On Nigeria Cocoa farming in southwest the achievement of indigenous entrepreneurship: YES! And was good for welfare of mass of population Growth of state intervention in cocoa trade (and export crops in general) began with the introduction of statutory MARKETING BOARDS in 1939 – 21 years before Independence (Bauer critique 1954) Debate about effects of marketing boards in agricultural export economies (P. Bauer)

On China Chinese take-off partly a triumph of capitalism, without capitalists having any power? Consider Huang’s arguments on Chinese capitalism: 1999s/2000s distinction rural/urban, private/foreign distinctions

On India Tariff protection under colonial rule? Began only in 1924 (selective infant industry protection) & 1931 (general tariff) Tata: Post-independence: was Tata really out of favour? Yes and no Tata’s investment in India’s science base (Tata Institute for Fundamental Research TNC from the South

The Supply of Entrepreneurship: Does Culture Matter? For explanation, the “problem” of embeddedness (Granovetter was actually talking about embeddness of economic activity in social whole) Commonsensically, yes; but evidence? (Innovation; success of some firms compared to others) Gerschenkron position

Cases Why was modern manufacturing by Indians initially dominated by Parsees such as Tata, rather than the majority Hindus (e.g. the Marwaris)? Why did Davies and Coker respond first to the market opportunity to go into cocoa planting – rather than others who had the same opportunity? (Hopkins)

Culture an impediment to Entrepreneurship? Value of pursuing growth not necessarily Western (e.g. Asante of Ghana), and not always the only thing that matters in the West (e.g. French 35-hour week) Cultural – or political -- values not always bad for entrepreneurship: e.g. patriotism may legitimate pursuit of wealth (Coker in Lagos; maybe Meiji Japan)

Different Entrepreneurial and Managerial Roles Distinctions: entrepreneurs (bringing factors of production together) not necessarily the same as capitalists (owners of capital) Significance of limited liability: divorce of ownership from control Entrepreneurship in late-developing economies: “adaptive” rather than “innovative”? (Kilby)

Different Entrepreneurial and Managerial Roles (2) Not every business owner is an entrepreneur, or are they? E.g. Schumpeter’s view of entrepreneurs as innovators, mould-breakers Differences in context and sector matter: economies of scale: major in most manufacturing industries, but not usually in agriculture (G. Federico) When and in what sectors can business schools help? (are they anyway about professional management rather than entrepreneurship in the classic sense?)

CONCLUSION Many thanks for a very interesting presentation (I liked the debate format) & discussion!