GEORGE GILDER is a person who drives economists up the wall. The reason is that he writes about their subject with far more lucidity, insight, enthusiasm, and verve than they do. In his latest book, The Spirit of Enterprise, he celebrates the entrepreneur, that wellspring of progress, the hero, who undertakes enormous risks in the face of impossible odds and brings forth benefits to mankind that far exceed the rise in his personal net worth.
It is entrepreneurs who lead the economy and create the wealth over which politicians posture and struggle. In a series of personal histories, Gilder shows that economic progress is the result of specific exertions of individual men and women who know that nothing will ever be attempted if all possible objections must be first overcome. In most cases these heroes and heroines must overcome not only initial defeat, but the experts who demoralize them and the governments that deter them.
In left-wing mythology, the rise of the postwar Japanese economy is attributed to an industrial policy administered by MITI, the Ministry of International Trade and Industry. However, if MITI had had its way, Sony never would have produced a magnetic tape recorder or a transistor radio, and Honda never would have produced a single car, much less the famous Civic with the CVCC engine -- breakthroughs in efficient transportation and air pollution control. The names Masaru Ibuka and Akio Morita, Sony's founders, and Soichiro Honda would be unknown in the annals of business history.
MITI found Sony's idea of a transistor radio to be preposterous, and Honda's motorbikes were "precisely the kind of product that MITI wished to discourage." Honda's decision in the mid-1960s to enter automobile production coincided with renewed appeals from MITI leaders for disinvestment in Japanese car production on the Galbraithian grounds that automobile production would inevitably be dominated by established foreign companies.
But while MITI lacked vision, "Soichiro Honda had a plan." So did Ibuka and Morita and thousands of others. Together they proved wrong the leading Western expert on Japan, Edwin O. Reischauer of Harvard, who in 1950 declared Japan to be a nearly hopeless case.
Entrepreneurs are not unique to Japan. They exist wherever they are not foreclosed by socialism or crowded out by the policies of the welfare state. Historically, the United States has been a major breeding ground, and Gilder introduces us to some of the hardy visionaries whose products are a routine part of our lives. One is J.R. Simplot, the Idaho farm boy who pioneered vegetable dehydration and the frozen french fry. At a critical stage his partners lost their faith and defected. Amazed at their blindness to opportunity, Simplot declared, "I ain't no economist, but I got eyes to see." In his seventies he could still see and, despite the warnings of experts and his own financial division, provided the venture capital for Micron Technology, which beat competitors on three continents enjoying the help of four governments to the 64K RAM microchip.
Others are Ward and Joe Parkinson and Doug Pitman, Micron's founders, who entered high tech at the top and succeeded; Milos Krofta, the Yugoslav refugee from communism who pioneered the flotation water purification process in the United States; and John Masters, founder of the Canadian Hunter Corporation, who, after Exxon had given up, found the primeval sea under the Canadian Rockies containing the Elmworth Basin. All are men of faith and vision who were resilient in the face of continual frustration.
Perhaps Gilder's most fascinating chapter is the story of the Cuban refugees who poured into Miami. While experts bemoaned the shockingly low welfare benefits available, the new arrivals went to work creating new wealth. "By 1980, Cuban households in Florida had higher incomes than other Floridians. In the recovery of 1983, Florida with 392,000 new jobs lagged only behind the twice as populous California (449,000 new jobs) in creation of employment and led third place Texas by 139,000 new jobs." Gilder quotes Chamber of Commerce leader Lester Freeman: "The best thing that's happened to Miami since air conditioning was when Fidel Castro read Karl Marx." By driving out Cubans of spirit and enterprise, Castro revitalized Miami and made it the preeminent Cuban city in the world. The most important effect of socialist tyrants, says Gilder, is to bequeath their enterprising and creative citizens to the United States, where they become too busy creating wealth out of liberty to share the experts' gloomy outlook about insufficient welfare services.
It is unfortunate that liberal intelectuals in the United States got on the wrong side of progress and denounced as greedy and immoral the process that allows poor immigrants to become successful and independent people. Gilder believes that today new immigrants are essential to keeping alive the spirit of enterprise in the United States. "Nothing," he writes, "has been so rare in recent years as an Ivy League graduate who has made a significant innovation in American enterprise." But while our schools and universities wean native-born Americans from the faith of their fathers, waves of immigrants are discovering it anew. If the United States is saved from a welfare culture and the dependence of the individual on politics, we will owe our salvation to the myriad of refugees from socialism and to writers like George Gilder.