On Humility In Human Progress - Implications For Entrepreneurial Awareness

Entreprenuers often fail. Most envision ideas of invention or theory in their own sphere of grandeur, ignorant of how the rest of the world fails to attribute their value. To what should entreprenuerial awareness focus? Kirzner in Action and Alertness writes of awareness to error and discovery as a source of entrepreneurial activity. I propose an additional source. Successful entrepreneurial awareness arises from awareness to economic orders developing en masse.

Hayek writes in Individualism, “[Reason] is a product of an acute consciousness of the limitations of the individual mind which induces an attitude of humility toward the impersonal and anonymous social processes by which individuals help to create things greater than they know, while the latter is the product of an exaggerated belief in the powers of individual reason and of a consequent contempt for anything which has not been consciously designed by it or is not fully intelligible to it.”

An individually successful entrepreneur merely stakes claim to the recognition of a newly established economic order, unrecognized beforehand. This is the reason with a capital R, Hayek discusses. True entrepreneurial activity is a humble and anonymous process. There is no fantasy of something new. It is a recognition of an economic, scientific, or social movement already in progress.

The True Fuel of True Individualism

Paraphrasing Hayek in Individualism: True and False, "The individual pursing true order should expect objective results and payment for the results of his efforts rather than their subjective merits. The individual should bear the risk attached to that choice as well as the reward."

The fuel of spontaneous social order is that the individual efforts result in measurable rewards comensurate with the effort. Every individual is pursing the order for themselves. In a spontaneous social order these incentives are aligned such that the pursuit of one's self interest benefits the self-interest of another.

Hayek quotes Adam Smith as being a true individualist. Smith says, "It is not from the benevolence of the butcher, the brewer, or the baker that we expect our dinner, but from their regard to their own interest" (Wealth of Nations, p. 119). The order of markets is from the aligning of individual self-interests so that all players benefit from entering the game.