I don’t recall when I first heard the word “entrepreneur,” but I remember clearly the man I heard it from. In junior high and high school from the mid-to-late 1980s, I began paying attention to politics, and I remember being particularly struck by President’s Ronald Reagan’s praise for the heroic entrepreneur.
He spoke, I remember, of entrepreneurs who create jobs and improve society and how they were held down needlessly by overregulation and high taxation. Those speeches continue to inspire my work in fighting for entrepreneurs crushed by burdensome taxation and regulatory monstrosities like Sarbanes-Oxley and Dodd-Frank.
So I was mystified by Henry Olsen’s assertion — recently in National Review and earlier in a co-authored Commentary article, “If Ronald Reagan Were Alive Today, He Would Be 103 Years Old” — that Reagan didn’t really believe there was anything special about entrepreneurs.
In attempting to dissuade Republicans from prioritizing the lowering of top tax rates for individuals and corporations, Olsen writes in NR: “Supply-side theory lionizes the entrepreneur. . . . But one will look in vain to find even a semblance of that sentiment in Reagan’s speeches.” Olsen adds that in Reagan’s view, the entrepreneur’s “contributions are no less, and no more, important to American prosperity than those of the worker, the farmer, or the shopper.”
During his presidency, Reagan grasped the crucial importance of not just the concept of the entrepreneur but of the word itself.
Moreover, Olsen implies that Reagan rarely even said the word “entrepreneur.” Olsen says he’s “read all of the major speeches Reagan gave on the economy or taxes between 1979 and his signing of the tax-cut bill in 1981.” In those speeches, Olsen reports, Reagan used the term only once.
So were my memories of Reagan praising the entrepreneur deceiving me? I decided to do a word search of every speech and public statement during his presidency on the Reagan Presidential Library and Museum’s digital archives. No, my memories weren’t deceiving me.
Reagan actually used the phrase “entrepreneur” a whopping 186 times during his presidency. He referred to entrepreneurs in presidential proclamations, radio addresses, and major speeches, including his televised address to the nation on tax reform in 1985 and his address to the United Nations General Assembly in 1987. (Curious readers may do the search here.)
Try to square Olsen’s contention that Reagan believed entrepreneurs’ “contributions are no less, and no more, important to American prosperity than those of . . . the shopper” with Reagan’s recommendation, in his famous 1985 televised tax reform address, that young people become entrepreneurs:
To young Americans wondering tonight, where will I go, what will I do with my future, I have a suggestion: Why not set out with your friends on the path of adventure and try to start up your own business? Follow in the footsteps of those two college students who launched one of America’s great computer firms from the garage behind their house. You, too, can help us unlock the doors to a golden future. You, too, can become leaders in this great new era of progress — the age of the entrepreneur. [Emphasis added]
Olsen’s assertion about Reagan’s use of the word “entrepreneur” during the very early years of his presidency may be technically true. Reagan appears to have started regularly referring to “entrepreneurs” in 1983, and continued to use the term frequently through the end of his presidency. But this type of omission is akin to pointing out that Reagan didn’t call the Soviet Union the “evil empire” in 1981 or 1982 without noting that Reagan used this phrase in a prominent speech in 1983.
Reached via e-mail, Olsen explains, “I reviewed his [Reagan’s] speeches from 1979 to 1981 because that was the crucial period for determining his economic legacy.” He says he was “aware that he [Reagan] uses the word ‘entrepreneur’ more frequently thereafter,” but, “I do not think my use of evidence is selective and misleading,” because the later speeches do not show Reagan “changed his mind about the nature of economic development in the subsequent years.”
Indeed, Reagan did not change his mind. He was always a supply-sider. And during his presidency, Reagan grasped the crucial importance of not just the concept of the entrepreneur but of the word itself.
Olsen also falsely attributes to supply-siders the notion that “economic growth is due to the very few.” On the contrary, true supply-side economics — based on classical economic principles rather than Keynesian “demand-side” prescriptions — posits that with the right tax and regulatory incentives, just about anyone can become an entrepreneur, a point Reagan made in a 1983 radio address from Camp David:
Too often, entrepreneurs are forgotten heroes. We rarely hear about them. But look into the heart of America, and you’ll see them. They’re the owners of that store down the street, the faithfuls who support our churches, schools, and communities, the brave people everywhere who produce our goods, feed a hungry world, and keep our homes and families warm while they invest in the future to build a better America.
Of course, lower tax rates aren’t enough for budding entrepreneurs to have what Lawson Bader, president of my institution, the Competitive Enterprise Institute, calls the “freedom to prosper.” That’s why CEI is focused on cutting away the regulatory red tape strangling entrepreneurs, from biotech drug makers to energy explorers to Main Street banks and credit unions.
Conservatives can certainly debate what Reagan would do, or even discard Reagan’s prescriptions if there is a compelling reason. But we must never forget Reagan’s love of the entrepreneur, as we carry that love forward in our policy ideas.
— John Berlau is senior fellow for finance and access to capital at the Competitive Enterprise Institute.