This article was published in China Science Daily (January 29, 2018, p. 1, major news). When it was published, a few sentences were deleted, but the key content was all retained.
The reason I framed it around the report to the Nineteenth National Congress was that this was required by the commission, but I can accept this kind of accommodation; especially since my final paragraph was not cut, the critical stance remains quite clear.
The report to the Nineteenth National Congress proposes to “stimulate and protect entrepreneurial spirit, encouraging more social actors to devote themselves to innovation and entrepreneurship.” In this way, “entrepreneurial spirit” has for the first time been solemnly elevated to the level of a national strategy.
So what exactly is “entrepreneurial spirit”? An earlier State Council document once gave an official definition: “we should promote the spirit of entrepreneurs loving the nation, being dedicated to their work, abiding by laws and regulations, and working hard; the spirit of innovation and development, focusing on quality and striving for excellence; and the spirit of fulfilling responsibilities, daring to take on tasks, and serving society.”
The three aspects mentioned here—“working hard, striving for excellence, serving society”—are obviously worth promoting, but they do not seem to apply exclusively to entrepreneurs. People in other walks of life, such as workers, scholars, and leaders, should all possess the spirit of working hard, striving for excellence, and serving society. So, to understand “entrepreneurial spirit,” it is not enough merely to talk about these three points; we also need to understand what unique missions “entrepreneurs,” as a role distinct from other social roles, have.
So what kind of role is an “entrepreneur,” really? Clearly, this is a concept that originated in the West, but if we are to promote entrepreneurial spirit in China in the new century, we must first sort the wheat from the chaff and strip from this concept some of its dross or confusion.
The word entrepreneur (entrepreneur) originally appeared with a strong colonial background, referring in particular to those expeditions to overseas places; later, the rise of entrepreneurs was accompanied by the rise of capitalism, so the term also easily became confused with “capitalist.”
Now that we want to promote entrepreneurial spirit, of course we must learn from historical lessons and remove the colonial overtones of conquest and plunder, while retaining the broad horizon of the age of navigation, the starry seas, and the adventurous spirit of bold exploration; we must strip away the capitalists’ pursuit of profit at all costs and exploitation and oppression, while inheriting the spirit of fair competition and respect for contracts from the age of capital.
Of course, the spirit of adventure and the spirit of contract are still not enough to sketch out the unique role of the “entrepreneur.” What exactly do entrepreneurs take risks for? In other words, what exactly do entrepreneurs do?
In the report to the Nineteenth National Congress, entrepreneurial spirit is discussed together with “encouraging innovation and entrepreneurship.” Clearly, “innovation and entrepreneurship” is precisely the mission of the “entrepreneur.”
The most famous definition of “innovation” comes from Schumpeter, who believed that what entrepreneurs do is called “creative destruction.”
“Innovation and entrepreneurship” means “destruction.” What is being destroyed? It is the destruction of “balance.” Entrepreneurs are precisely those in society who strive to break balance, those “unstable elements.”
This is not contradictory to a “harmonious society.” Harmony is not simply a state of balance, not a stagnant pool of water, but a proper tension maintained amid ceaseless change.
Take a simple example: suppose there are two households in a village, Zhang San and Li Si. Zhang San raises chickens, Li Si fishes. Every month Zhang San sells Li Si one chicken in exchange for one fish, and everyone is quite satisfied. If this balanced state were maintained forever, this little society would forever see no change; their lives would not be impoverished, but they would no longer be rich.
But if Zhang San is an entrepreneur, actively innovating, striving for excellence, and constantly improving chicken-raising techniques, and as a result he can provide two chickens, three chickens every month… then what happens? Apart from selling one chicken in exchange for one fish, who should he sell the extra chickens produced by innovation to?
Clearly, if Li Si still maintains the old output and asks Zhang San to exchange two chickens or three chickens for Li Si’s one fish, that would obviously be unfair. If Zhang San’s innovation brings him no benefit, while Li Si, who is always content with the status quo, gets to enjoy all the dividends of innovation, such a society would be hard to sustain in its development. So if Zhang San wants to exchange the extra chickens he has produced for greater returns, he must open up new sales channels and establish new social relations. For example, he could ask Li Si to provide more fish; if Li Si cannot meet that demand, he may have to go find Wang Wu, who raises pigs, to exchange for pork. But Wang Wu’s pork may originally have been exchanged with Ma Liu’s beef, and Zhang San’s intervention will inevitably break some established patterns and orders; perhaps the entire market’s trade structure will be overturned. The Western “Industrial Revolution” began with technological innovation in the textile industry, which led to a sharp increase in textile output; this change spread rapidly like a domino effect, triggering transformation across all industries and thereby overturning the balance of trade relations between East and West.
So in the report to the Nineteenth National Congress, “entrepreneurial spirit” is proposed precisely under “deepening supply-side structural reform,” because the mission of entrepreneurs is to break the “balance between supply and demand” and overturn established market structures.
Entrepreneurs are different from ordinary “businessmen” (businessman). Entrepreneurs are meant to bring something new to society. For example, if Wang Wu runs errands between Zhang San and Li Si, helping Zhang San sell chickens while keeping a piece of chicken tail for himself, and helping Li Si sell fish while keeping a fish tail for himself, then Wang Wu is a “businessman,” not an entrepreneur. He can make market transactions faster and more lively, but he has not created anything new for the market as a whole (entity). That is why, when the report to the Nineteenth National Congress mentions “entrepreneurial spirit,” it emphasizes precisely that “the focus should be placed on the real economy.” It should be noted that “real” here is not meant in the physical sense, but in the economic sense; creating unprecedented digital products also counts as the “real economy.”
Therefore, the entrepreneur is a “revolutionary” who starts from the “material foundation,” from the “productive forces.” Of course, this is not to say that entrepreneurs only focus on production and supply on one side; after creating new products, they must more importantly creatively open up new markets and stimulate new demand.
Entrepreneurs are selfish, and at the same time necessarily altruistic: selfish in that they seek to reap the dividends of their own innovation and are unwilling to let lazy people enjoy the fruits of their contributions for free; altruistic in that they must spur other participants in the market to progress together if they are to truly enjoy the benefits of innovation. For example, after Zhang San improves chicken-raising techniques, he will naturally hope that Li Si will also improve fishing techniques, so that he can win a richer life, rather than just eating chicken until he grows sick of it. If the other participants in the market all remain at the stage of eating raw meat, then no matter how many sweaters I sell to them, what I get in exchange can only be the most primitive products. Only the shared prosperity of the whole society is what truly conforms to the entrepreneurs’ “self-interest.”
Of course, breaking balance always comes at a cost, especially for those content with the status quo; entrepreneurs are bound to touch their entrenched interests. Therefore, stimulating and protecting entrepreneurial spirit means constraining the power of vested interests, preventing them from enjoying the dividends of innovation without lifting a finger, and even more preventing them from abusing power against innovators in order to hold on to their old market positions.
Translated from the Chinese original with AI assistance. The original text is authoritative.
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