INT. STUDIO - DAY A young, energetic man, KEVIN LIEBER, stands in an open bright space behind an attractive desk, next to FIONA the puppet. Pedestals and shelves are arranged behind them with a series of PROPS — a giant pencil, busts of important economists, globes and other common indicators of education & economics. There are more objects relevant to economics on the desk. We also see a small GREENSCREEN "blackboard" and an attractive ILLUMINATED SIGN with the Foundation for Economic Education logo on it. SCENE 01: INTRODUCTION We see the "Invisible Hands" LOGO on the blackboard. KEVIN (to camera) Hi! Kevin here. Welcome back to "Invisible Hands". (beat) Have you ever wanted to open your own artisanal flavored-toothpick store? Well, of course. We all have! Being an entrepreneur sounds awesome, but what most people don't know is that entrepreneurship is also an extremely important part of any market economy. FIONA enters. FIONA Finally! Something that's actually fun! KEVIN (to Fiona) Hey, Fiona. FIONA After I get out of school, I want to be an entrepreneur! KEVIN Really? FIONA (excitedly) Yeah. That way I can be my own boss and be independent. KEVIN That's great! PROFESSOR (O.S) You know... We see the PROFESSOR. PROFESSOR There's so much more to being an entrepreneur than just setting your own schedule. Entrepreneurs play an incredibly important role in the economy. FIONA Don't ruin this for me... SCENE 02: ENTREPRENEURSHIP IS DISCOVERY A new quote appears as TEXT on the blackboard. It reads: "The best way to predict the future is to invent it." ― Alan Kay KEVIN Nah, he's right and it's awesome. Entrepreneurship is about finding new and valuable ways to help people. It is about discovering opportunities, innovating around problems, and creating value. FIONA So I guess I should think about as not just an activity ― a job people can do ― but as a whole way of thinking. KEVIN Yes! Entrepreneurship as a way of thinking emphasizes innovation, drive, and creativity. It's about having the vision to identify and discover unmet needs and then acting to satisfy them. PROFESSOR Entrepreneurs are both problem solvers and wealth creators. In the pursuit of profit, entrepreneurs combine the factors of production ― land, labor, and capital ― to produce goods and services people want & need. It's risky, because they only succeed if their solutions are actually valuable to other people. But, if they do succeed, that's how they create wealth. KEVIN Let's talk about that. In economics, the idea of "wealth" isn't what most people think it is. SCENE 03: WHAT IS WEALTH? FIONA It's just money and, like, being able to hang out with Taylor Swift whenever you want, right? The Professor shakes his head. KEVIN No... But that would be cool. PROFESSOR Wealth is a measure of the value of economic goods. And as you know... FIONA (in familiar exasperation) Value is subjective. Yes, I know already. KEVIN Exactly. So while money can represent someone's wealth, that's just an abstraction. Their wealth is all of the stuff they actually value. FIONA Like my laptop. KEVIN That, but it's also your apartment, your bike, your complete set of 1989 Donruss Diamond Kings Baseball cards― FIONA That’s just what you value. KEVIN (deliberately ignoring Fiona) The food in your fridge... Even your education. It's all the stuff that makes your life better. PROFESSOR The important thing to understand is that wealth isn't something that just naturally exists in the world ― It must be created. SCENE 04: VALUE CREATION FIONA Wait a minute. What about natural resources? If food counts, isn't an apple on a tree wealth, too? KEVIN Well... No. Someone still has to spend the effort climbing the tree and picking the apples before they can be consumed. That work ― planting, harvesting, gathering, hunting, arranging, building ― is how we create value. PROFESSOR And entrepreneurs play a key role in value creation. KEVIN Yep. Entrepreneurs create value for themselves by creating value for others. FIONA That's what's exciting to me about entrepreneurship! It's really important to me to earn a living by creating value and improving people's lives. SCENE 05: ENTREPRENEURSHIP AND ECONOMIC GROWTH We see new TEXT on the blackboard: "Businessmen are explorers, sometimes suffering shipwreck by their over bold conceptions, sometimes hitting on a path leading to revolutionary technical success." ― G.L.S. Shackle KEVIN That's good, because entrepreneurship is the essential foundation for economic growth. FIONA Really? That’s a lot bigger than I thought. PROFESSOR He's not kidding. Societies that encourage entrepreneurship through economic freedom tend to see much faster economic growth than those that don't. KEVIN picks up two phones, laying on the desk. KEVIN Plus, entrepreneurial discoveries and insights build on one another to create new and better products and processes. Entrepreneurs can even create entire new industries. In less than 20 years, we’ve gone from phones that barely text... (holds up Nokia 918) ...to phones that can run your entire life. (holds up a new iPhone) FIONA Thanks, Steve Jobs! KEVIN (quietly) And everybody who copied Steve Jobs... PROFESSOR And that created opportunities for other entrepreneurs to create other products and services like cases, screen protectors, and apps. SCENE 06: CREATIVE DESTRUCTION FIONA So, entrepreneurship creates opportunities for more entrepreneurship? KEVIN Yes! And it's an ongoing process. Societies that embrace entrepreneurship allow the old industries to get replaced as entrepreneurs think up new ones. Each time this happens, it creates more jobs, produces more wealth, and allows individuals to exercise their creative talents in totally new ways... Like how I get to make videos on YouTube for a living. That wasn't even possible just a few years ago! PROFESSOR That's what the economist Joseph Schumpeter called "Creative Destruction". Old jobs and industries are destroyed whenever entrepreneurs create new and better ones. It's like the market's own circle of life. FIONA Now that I know how important a role I’m going to play in the economy. I’m ready to get out there. Can't wait to be my own boss! PROFESSOR As an entrepreneur, you may not have a boss but, instead, if you’re successful, you will have many, many bosses ― your customers! SCENE 07: PRICE SIGNALS The PROFESSOR continues. PROFESSOR In a free market, your customers have the power to choose whether or not to buy your products ― and at what prices. And that's what creates the right incentives and gives you the necessary information to respond rapidly and effectively to your customers' needs. FIONA It sounds like you're saying prices, profits, and losses are actually signals that tell businesses what to do. PROFESSOR That's exactly right! KEVIN Those price signals ― how much people are willing to pay for your products, and whether or not you earn profits or losses ― are the feedback mechanism that will tell you if you’re doing a good job creating value for other people. PROFESSOR But rembmer... That's only possible in a market where you and your customers are free to make your own choices. KEVIN By the way... What’s your business idea? FIONA Artisanal flavored-toothpick store. KEVIN I’ll be your first customer. (to camera) If we think entrepreneurship is a good thing--and it is--we should encourage more entrepreneurship by celebrating entrepreneurs and encouraging economic freedom. Learn more about entrepreneurship at courses.FEE.org and check out FEE for tons more resources on how entrepreneurial thinking can radically improve your life… Even if you don’t start your own business. All three hosts say in unison. KEVIN, FIONA, AND PROFESSOR Thanks for watching!

Invisible Hands

FOLLOW US:


About this show

Popular YouTube host Kevin Lieber (VSauce2) hosts this informative and entertaining video series designed to introduce key concepts of economics to younger audiences through credible arguments, comedy... And puppets!

April 11, 2019

Far from just being their own bosses, entrepreneurs play an incredibly important role in the economy by discovering unmet wants or needs and creating the goods & services necessary to satisfy them. If they do this well, entrepreneurs create brand new wealth and make all of our lives better!

Over time, they drive technological development and economic growth. But they can only do this when they are free to enter the market and offer their products to potential consumers *and* when their customers are free to accept or reject these products based on their own subjective evaluation.


LINKS:
https://fee.org/articles/graduates-so...

Defining Entrepreneurship: 

http://www.youtube.com/watch?v=Oqgzjt...
Can automation be a friend of labor? 
https://www.huffpost.com/entry/can-au...
Stop vilifying venture capitalists
https://www.cnn.com/2012/01/13/opinio...
Are entrepreneurs modern day heroes?
http://www.youtube.com/watch?v=ChEImW...