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Friday, July 29, 2016

Young Entrepreneurs Learn About Value Creation

Another successful seminar

In FEE’s largest high school seminar to date, more than 100 students gathered at Berry College in Rome, Georgia in order to learn about the “Economics of Entrepreneurship” and acquire new ways of seeing the world through economic thinking.

This seminar boasted speakers from across the country, including Dr. Matthew Mitchell, a senior research fellow at the Mercatus Center at George Mason University; Bruce Rottman, a teacher of economics, history, and American government at Providence, Santa Barbara; Lauren Heller, associate professor of economics at Berry College; and Amy Baxter, founder of MMJ Labs.

The first day began with a lecture from Matthew Mitchell, in which he talked about how “Entrepreneurs Change the World.” Dr. Mitchell went through a timeline with the students, pointing out several important years in which products or services were created and changed the world. He started with 1858, the year the telegraph became widely used, included 1956, the invention of the cargo ship, and ended with 2007, the invention of the iPhone. Students began to see the necessity of entrepreneurs.

The following morning, Bruce Rottman kicked off the day by asking the students “Why Does Economic Thinking Matter for Entrepreneurs?” Mr. Rottman gave an introduction in how to think economically, which he claimed just meant thinking rationally. Explaining the difference between seen and unseen consequences, he taught the students to think about how a policy or decision affects all groups of people and also think of the effects over a long period of time.

Immediately after, Lauren Heller gave her first talk on the “Rules for Success”. She started by asking the students to define success, showing them that their success was mostly defined by economic prosperity and value creation. Professor Heller showed the students the importance of economic growth by showing the correlation between GDP and several other factors, including infant mortality rates, life expectancy, and reduction of poverty. The key to growth and entrepreneurship, the students learned, is property rights and the rule of law which protects property rights.

After lunch, the lectures began again with the question “Is Making a Profit Selfish?” posed by Mr. Rottman. He argued that a system which allows people to make as much money as possible (capitalism) is moral. By pointing out that the only way to make a profit in a free market system is to serve others and provide value, he made the students realize the morality of capitalism.

Continuing the theme, Professor Heller spoke on “Cooperation, Compassion, and Heart.” She showed how, by engaging in the economic marketplace, people are forced to cooperate and be compassionate, rather than steal and take from others. According to Professor Heller, markets help make a cleaner, greener planet. Property rights encourage people to take care of the land, and she cited the example of Botswana, which allowed property rights over elephants and therefore now has a much higher population of elephants than other sub-Saharan countries.

Later in the afternoon, Dr. Mitchell explained “The Economics of Politics.” He mentioned several economic policies which most, if not all, economists agree on: tariffs and import quotas reduce economic welfare; the U.S should not restrict outsourcing work to other countries; large federal deficits harm the economy; and minimum wage is unsustainable and increases unemployment among the young and unskilled. Even though most economists agree, these policies still exist because of politician’s incentives to listen to the majority of voters. He led an activity which showcased how a vote with only two choices limits options for many and forces them to choose a policy they might not necessarily agree with.

Beginning the third day, Dr. Mitchell came back to summarize the “Obstacles to Entrepreneurial Success” by showing students the correlation between economic freedom and prosperity. Students were able to see examples of limitations on economic freedom brought about by regulations and firms using government to gain an unfair advantage. By trying to establish a monopoly in order to have exclusive profits, companies lobby the government to institute things like business licenses. He gave the example of the taxi monopoly- in order to drive a taxi, drivers need to apply and pay for a license. This creates a barrier to entry into the market and benefits only those who are already established.

To energize the students, Professor Heller convinced them that “Anyone Can be an Entrepreneur” and gave examples of entrepreneurs throughout history. One of her examples was the inventor of the Snuggie, a product which seemed silly- a blanket with sleeves. However, Professor Heller added a personal touch by recounting the time she bought one as a Christmas present for her grandmother, who was ecstatic to receive it. She continued by saying the inventor of the Snuggie had no idea the happiness the Snuggie would create, nor did they care. They just wanted someone to buy the Snuggie, so the company could earn a profit.

As a guest speaker, Amy Baxter came in to relate her story with the students and relayed “The Importance of Entrepreneurship.” Dr. Baxter started as a pediatric emergency physician and was always looking for ways to make her patients more comfortable. After taking her child to get his shots, she realized he was afraid of the pain of the needle, so she created BuzzyⓇ, to help ease the pain. Students seemed inspired by her talk, understanding a real world application of creating value in the community.

For the final talk, Mr. Rottman spoke on “The Virtues of Entrepreneurship.” He encouraged students to think of entrepreneurship as a way to serve others in their community by fulfilling a need and ended the seminar by reminding the students that exchange motivated by profit is a form of peaceful cooperation.

Since the theme of the seminar was about entrepreneurship, students were split up into teams and had the opportunity to participate in a Shark Tank Activity. Given only a short amount of time to prepare, teams were tasked with thinking of a need in their community and finding a solution by providing a good or service. Creativity flowed in the preparation time and final products ranged from tracking devices for toddlers to non-profits intended to help homeless college students.

Students also had the opportunity to comprehend the intricacies of free trade through a hands-on activity; discuss free market principles in structured discussion times; and connect with their peers, making lifelong connections and friendships.

After three full days, students walked away from the seminar with a better understanding of the positive social role of the entrepreneur and the virtues of value creation. Almost all said their expectations of the seminar were greatly exceeded; they returned to their hometowns inspired to learn more about — and use — economic thinking in their everyday lives.

  • Elizabeth Sorby is a 2015 graduate from Kennesaw State University, where she majored in International Affairs, concentrating in International and Diplomatic Service, and minored in Peace Studies.