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Are Entrepreneurs Our Enemies?

We have to imagine a society with both social democratic civil servants and adventurous, risk-taking businesses

Michael Walzer
May 28, 2020
Puritan Bennett
Puritan Bennett
Puritan Bennett
Puritan Bennett

One thing we might learn from the COVID-19 pandemic: The citizens of a state with a competent civil service committed to social planning, universal health care, and full employment will get through crises like this one with less pain than the citizens of a state like our own. My friends on the left have been saying this again and again, and they are right—or mostly right. I will suggest a caveat below. But first let me drive the point home with a story about what I think of as New York City’s social democratic moment. I know this story because my sister, Judith Walzer Leavitt, an historian of medicine at the University of Wisconsin, has written a lovely account of it: “Be Safe, Be Sure: New York City’s Experience with Epidemic Smallpox.” Here is a very brief version of the story.

In 1947, an American tourist returning from Mexico brought smallpox to New York. A few people were infected, and the health commissioner, Israel Weinstein (a graduate of City College), realized the danger and called for the vaccination of all New Yorkers. The city was rapidly mobilized; vaccinations were made available, at no charge, in every public and parochial school in the city and at every police and fire station. Within two weeks, 5 million New Yorkers were vaccinated. Where did the vaccine come from? Mayor William O’Dwyer, acting very quickly, called the heads of every private laboratory and drug company in New York to a meeting in his office. When they had all arrived, he locked the door and told them that they could not leave, not any of them, until they had agreed to produce the needed vaccine and sell it to the city at a minimal cost. Under duress, they agreed.

The city’s remarkable success (only two people died of smallpox) undoubtedly had something to do with New Yorkers’ memory of the discipline and solidarity of the war that had ended only two years before. Still, a smart health commissioner, a strong civil service, and a mayor willing to break the rules of the free market—all this was also necessary to stop an epidemic. The last point is especially worth remembering given market performance in these past months.

Another story has been making the rounds; it was told with relish and outrage by Noam Chomsky in an interview posted on Truthout last April. (I will tell the story as he told it; there are variant accounts, but for my purposes the differences don’t matter.)

Thinking ahead, imagining possible pandemics, the Obama administration signed a contract with a small (think startup or upstart) company making cheap, portable ventilators. A much bigger company that produced big, heavy, and expensive ventilators, fearing competition, then bought the small company, shut down the production of the cheap, portable ventilators, and canceled the government contract, claiming that it wasn’t profitable enough. Government regulators approved the merger of the two companies, apparently without questioning its likely consequence.

Here is a story of predatory capitalism, profit-driven economic behavior, and a corrupt, laissez faire state—so it was told, and so it is. But neither Chomsky nor anyone else that I could find seems to have noticed that the story is also about the value of the entrepreneurial enterprise represented by the small company and its portable ventilators. In this case, the entrepreneurs sold out, took the money and ran—standard economic behavior. They didn’t insist on continuing to produce their ventilators for the sake of the common good. But it was the government regulators who should have made sure that the merged company delivered the ventilators that the Obama people had contracted for. They are the ones who failed to serve the common good. Still, even if they had been committed social democrats, they couldn’t have produced the portable ventilators by themselves.

Entrepreneurs are necessary people; they aren’t necessarily benevolent people; they produce and sell a lot of junk—but also things like those portable ventilators. We need to make sure that there is space for them to do what they do. There has to be motivation, too, not just money but also honor and celebrity. It is no affront to social democratic egalitarianism, as I understand it, if the entrepreneur who sells portable ventilators makes more money than I do and is more widely known than I am.

Committed social democratic civil servants and adventurous, risk-taking entrepreneurs: These are different kinds of people. Looking left and right, one could say: my kind and your kind. We have to imagine a society that includes both.

Michael Walzer is professor (emeritus) at the Institute for Advanced Study in Princeton. He is the author of Just and Unjust Wars and The Paradox of Liberation, among other books, and the former co-editor of Dissent magazine.