A Special Valentine's Message On Romantic Love

Below is a repeat of last year's Valentine's day post. I am not sure if the links are still working:

The first one is Researchers at AAAS Annual Meeting Explore the Science of Kissing . The following quote gives you an idea of what it is all about: "Kissing, it turns out, unleashes chemicals that ease stress hormones in both sexes and encourage bonding in men, though not so much in women." I guess economists call this "interdependent utility functions." Meaning that what brings one person pleasure brings brings the other person pleasure, and vice-versa.

The other is Cocoa Prices Create Chocolate Dilemma. The article opens with "Soaring cocoa prices are creating a Valentine's Day dilemma for chocolate makers. They don't want to raise retail prices when recession-weary consumers are trying to limit their spending." The problem is crop diseases in Ivory Coast and Ghana. You might need to be a WSJ subscriber to read the whole article.

Here is a new article from yesterday's San Antonio Express-News (2-13-2011). Romance in bloom at workplace: Survey indicates 59% have taken the risk-filled leap. It seems like many people admit to having a romance at work and/or meeting their spouse at work. So what starts out as economic activity leads to some other needs being met.

Now the economic definition of romantic love.

Abstract: "Romantic love is characterized by a preoccupation with a deliberately restricted set of perceived characteristics in the love object which are viewed as means to some ideal ends. In the process of selecting the set of perceived characteristics and the process of determining the ideal ends, there is also a systematic failure to assess the accuracy of the perceived characteristics and the feasibility of achieving the ideal ends given the selected set of means and other pre-existing ends.

The study of romantic love can provide insight into the general process of introducing novelty into a system of interacting variables. Novelty, however, is functional only in an open system characterized by uncertainty where the variables have not all been functionally looped and system slacks are readily available to accommodate new things. In a closed system where all the objective functions and variables must be compatible to achieve stability and viability, adjustments in the value of some variables through romantic idealization may be dysfunctional if they represent merely residual responses to the creative combination of the variables in the open sub-system."

The author was K. K. Fung of the Department of Economics, Memphis State University, Memphis. It was from a journal article in 1979. More info on it is at this link. The entire article, which is not too long, can be found at this link.

Then there was this related article: Love really is blind, U.S. study finds. Here is an exerpt:

"Love really is blind, at least when it comes to looking at others, U.S. researchers reported on Tuesday.

College students who reported they were in love were less likely to take careful notice of other attractive men or women, the team at the University of California Los Angeles and dating Web site eHarmony found.

"Feeling love for your romantic partner appears to make everybody else less attractive, and the emotion appears to work in very specific ways in enabling you to push thoughts of that tempting other out of your mind," said Gian Gonzaga of eHarmony, whose study is published in the journal Evolution and Human Behavior.

"It's almost like love puts blinders on people," added Martie Haselton, an associate professor of psychology and communication studies at UCLA."

What College Majors Pay The Highest?

See this report from payscale.com  

Click here to see more info from Yahoo Finance

Here are the top 15

Here is an excerpt from the Yahoo article

"Regardless of what career path you choose, Katharine Brooks, author of "You Majored in What? Mapping Your Path from Chaos to Career," says students need to think beyond their bachelor's degrees.

"Start acquiring experience early on in your academic career. Don't wait until your senior year to look for an internship," she says.

To get a jump on the job hunt, Brooks recommends students create a LinkedIn account, make contacts and reach out to professional associations in their field as soon as possible."

""Economics majors tend to pursue business and finance-related fields," says Brooks. "Banking and finance are in the top of the salary strata."

While econ majors do land lucrative gigs with banks and other financial institutions, the degree is also frequently used to establish careers in law, consulting, education, research, government, nonprofit and public policy work, reports the American Economic Association.

Brooks adds that how much you make corresponds more to your career field than your major. For example, an economics major who goes into nonprofit work may earn less than a liberal arts major who enters the financial sector. When choosing a major, Brooks encourages students to think about their desired career field and how well skills developed in a given major might parlay into different occupations."

But neuroscience says that maybe you will be more successful if you do something you love. Click here to read about that

Public universities spend more per athlete than they do per student

See Report Describes Big Gaps in Athletic vs. Academic Spending by Brad Wolverton of The Chronicle of Higher Education. Excerpts:

"Public universities in the six most powerful NCAA conferences surpassed $100,000 per player in median annual athletic spending in 2010, a new study has found—six to 12 times the amount those colleges spent per student on academics."

"According to the report, “Academic Spending Versus Athletic Spending: Who Wins?,” athletic departments in the Southeastern Conference—which have some of the swankest facilities and best-paid coaches—spent nearly $164,000 per athlete in 2010. That was 12 times as much as those institutions spent per student on academic expenses..."

"Only a couple of dozen athletic programs operate in the black, with many major-college programs requiring a substantial institutional subsidy to remain competitive. The less-wealthy FBS programs now spend $11-million to $14-million a year to subsidize sports..."

"Athletic costs increased at least twice as fast as academic spending, on a per-capita basis, across each of the three Division I subdivisions."

There are alot of interesting comments. One is from Chris Marrou (and it might be the former San Antonio news anchor). Here is his comment:

"When an academic criticized Darrel Royal's salary at the U. of Texas in the 1960s, he replied, "When a math professor can draw 80,000 people at Memorial Stadium by working out equations on a blackboard at midfield, I'll take a lower salary." And so it continues..."

IHOP Gives Away Free Pancakes And Gets Slammed

See Bird Road IHOP Slammed Yesterday During Free Pancake Day by Ily Goyanes of the Miami New Times. They wanted to raise money for charity. Excerpt:

"Cherry, a server who has been with IHOP for 13 years, told us they had been swamped the entire day. "From 7 a.m. to 10 a.m., it was like this. Then when school let out, it started again and has been this way nonstop."

""This way" refers to there not being a single table available and a waiting list. Did they raise a lot for charity, though? "We had a lot of teenagers.""

"Even though the majority of patrons were flapjack freeloaders, the restaurant was able to raise some funds for Miami Children's Hospital." "Most of the employees had been there since early in the morning. During our interviews, they were going on 15 hours of cooking, serving, and cleaning..."

Yes, strange things happen when you give a scarce good away for free. There is not enough to go around so people have to wait.

Click here to read about a mom who had a bad experience last year on free pancake day

Yesterday Was The 100th Anniversary Of The Ratification Of The 16th Amendment To The Constitution

It authorized a federal income tax. See Many Unhappy Returns—Millions of Them: It's the 100th anniversary of the 16th Amendment. Don't forget to file your taxes By JAY STARKMAN, from Saturday's WSJ. Excerpt:

"The country's first income tax was implemented to raise money during the Civil War. The tax was repealed in 1872 because the revenues were no longer needed. The idea was resurrected in 1894 as a populist measure to tax the rich when William Jennings Bryan successfully championed passage of a 2% income tax on annual income over $4,000. The rich denounced it as communistic and predicted that many would flee the country rather than pay the tax."

"Over the years, the personal exemption and standard deduction have not kept pace with inflation, so today 70% of the population is subject to income taxes. Almost 60 million returns, mostly under $20,000 in gross income, pay no income tax, largely the result of the earned-income and child tax credits. The individual income tax today raises $950 billion annually through 144 million tax returns. Of this, the top 40 million returns pay about $856 billion and the bottom 104 million returns only about $94 billion."

See also Mickelson and the Sports Star Tax Migration: If Lefty moves to a state with no income tax like Florida, he'll find he has plenty of elite athlete company by ALLYSIA FINLEY, from the WSJ, 1-27-2013. If you can't access either article, email me. I might be able to email them to you.

To see the history of federal income tax rates, go to U.S. Federal Individual Income Tax Rates History, 1913-2013 (Nominal and Inflation-Adjusted Brackets) from the Tax Foundation. In 1913, you paid 1% on all income up to $20,000. Any amount over $500,000 you paid 7%.

Fake Economist Fools Portugal

See The fraudster who fooled a whole nation: Portuguese media pundit exposed as conman: Artur Baptista da Silva faces prosecution after faking his 'career' as an economics expert by Alasdair Fotheringham of The Independent.

What a heinous crime, impersonating an economist. There surely is no punishment too great for this outrage. His behavior is an insult to all real economists. Make him walk the plank. Throw him to the lions in the Coliseum.

Excerpts:

"As an ex-presidential consultant, a former adviser to the World Bank, a financial researcher for the United Nations and a professor in the US, Artur Baptista da Silva's outspoken attacks on Portugal's austerity cuts made the bespectacled 61-year-old one of the country's leading media pundits last year.

The only problem was that Mr Baptista da Silva is none of the above. He turned out to be a convicted forger with fake credentials and, following his spectacular hoodwinking of Portuguese society, he could soon face fraud charges.

Mr Baptista da Silva's conversion into the latest must-interview figure on the media circuit began when he turned up last April at Lisbon's main philanthropic institution, the Academia do Bacalhau, with a large supply of business cards – which, it later turned out, bore false credentials – and an impressive-sounding dissertation entitled Growth, Inequality and Poverty. Looking Beyond Averages which, it also transpired, was "borrowed" from its writer, a World Bank employee, via the internet.

At the time, Mr Baptista da Silva also claimed to be a social economics professor at Milton College – a private university in Wisconsin, US, which actually closed in 1982 – and to be masterminding a UN research project into the effects of the recession on southern European countries. He even, some reports say, tried to pass himself off as a former adviser to Portugal's President, Joaio Sampaio, and the World Bank."

Now if only more people watched more Law Order: Criminal Intent. Click on the link to see more information about that episode from 2002 titled "Phantom." Here is the description:

"Goren and Eames must untangle the story behind a mysterious man living a double life while telling his family that he is an economist for the United Nations. As his world of lies unravels, murder seems to be his only way out."

Here are links with more information on that episode:

Wikipedia  

Law Order Wiki

Tradeoffs: More Goods And Services Might Mean Less Clean Air

In my macro classes this week, we covered opportunity cost, the idea that there is no such thing as a free lunch. See Pollution highlights the price China is paying for rapid development by David Piper of Fox News. Excerpts:

"Beijing has developed into an impressive modern city over the past two decades. But a tourist visiting the Chinese capital over the past four days would have difficulty seeing many of its ancient and modern landmarks because of the horrendous pollution hanging over the city."

"The Beijing Municipal Environmental Monitoring Center is recommending that children and the elderly stay indoors.

Local media has reported a sharp rise in people seeking treatment at hospitals in the capital for respiratory problems."

"According to the Beijing authorities, measurements show the air containing more than 700 micrograms per cubic meter in many parts of the city over the weekend.

To put that into context, the World Health Organization considers it safe to only have as much just 25 micrograms per cubic meter."

Another Semester Has Started

Welcome to any new students. I usually post something three times a week on Wed., Fri. and Sun. The next post should be next Wed. The entries usually have something to do with a basic economic principle that is related to a recent news story. If you want to learn more about me go to Why is college so hard?

Structural Unemployment In The News-Computers Can Now Tell Jokes

See A Motherboard Walks Into a Bar ... by ALEX STONE, from yesterday's NY Times.

There is a program "called Standup (for System to Augment Non-Speakers’ Dialogue Using Puns), a program that generates punning riddles."

If you are replaced by a machine, you are structurally unemployed. So I guess Jerry Seinfeld will soon be out of a job. All the programmers have to do is have an animated or holographic image of a "comic" telling the jokes the computer has come up with. Imgaine paying only 25% or 50% of the price Seinfeld charges for the same amount of laughs.

The Jazz Protagonists Perform Heroic Tribute To Dave Brubeck At Boardwalk Bistro And The Joint Was Really Flipping

Dave Brubeck died on December 5. The music the Jazz Protagonists played last night was great, lots of Brubeck's best stuff. Here is a link to their site:

Jazz Protagonists

It seemed more crowded than usual at Boardwalk Bistro and I think many people came especially for the music.

Dave Brubeck made the cover of time magazine in 1954, just before he turned 34. Here is the cover

 

 

Here is a link to a post from a couple of years ago: Dave Brubeck, Economist

Jerry Seinfeld, Like The Novelist Marcel Proust, Is A Neuroscientist

Here is what Jerry Seinfeld said in last Sunday's New York Times Magazine about why he keeps practicing his stand up act:

"When he can’t tinker, he grows anxious. “If I don’t do a set in two weeks, I feel it,” he said. “I read an article a few years ago that said when you practice a sport a lot, you literally become a broadband: the nerve pathway in your brain contains a lot more information. As soon as you stop practicing, the pathway begins shrinking back down. Reading that changed my life. I used to wonder, Why am I doing these sets, getting on a stage? Don’t I know how to do this already? The answer is no. You must keep doing it. The broadband starts to narrow the moment you stop.”"

See Jerry Seinfeld Intends to Die Standing Up. I like this part, too:

"Seinfeld believes funniness is genetic. When his father, Kalman, was stationed in the Pacific during World War II, he’d transcribe jokes he heard and store them in a box for safekeeping. “In the army, that’s kind of how you got through it,” Seinfeld says. “People would tell jokes by the score, because what else are you going to do to maintain sanity? The recognizing of jokes as precious material: that’s where it starts. If you’ve got the gene, a joke is an amazing thing. It’s something you save in a box in a war.”"

Everyone knows that Proust sas a neuroscientist because there is a book by that title. Click here to go to the Amazon link. Here is their description:

"In this technology-driven age, it’s tempting to believe that science can solve every mystery. After all, science has cured countless diseases and even sent humans into space. But as Jonah Lehrer argues in this sparkling debut, science is not the only path to knowledge. In fact, when it comes to understanding the brain, art got there first.

Taking a group of artists — a painter, a poet, a chef, a composer, and a handful of novelists — Lehrer shows how each one discovered an essential truth about the mind that science is only now rediscovering. We learn, for example, how Proust first revealed the fallibility of memory; how George Eliot discovered the brain’s malleability; how the French chef Escoffier discovered umami (the fifth taste); how Cézanne worked out the subtleties of vision; and how Gertrude Stein exposed the deep structure of language — a full half-century before the work of Noam Chomsky and other linguists. It’s the ultimate tale of art trumping science.

More broadly, Lehrer shows that there’s a cost to reducing everything to atoms and acronyms and genes. Measurement is not the same as understanding, and art knows this better than science does. An ingenious blend of biography, criticism, and first-rate science writing, Proust Was a Neuroscientist urges science and art to listen more closely to each other, for willing minds can combine the best of both, to brilliant effect."

A New York Times blog has more. See Jerry Seinfeld, Comedy Athlete

The San Antonio Express-News Printed My Op-Ed On Taxes And Spending

It was in today's paper. Here is the link: Cut government spending to boost economy. Here is the article in case the link does not last very long.

Re: “Laffer Curve a tool to help avoid fiscal cliff,” Other Views, Dec. 10:

Mickey Roth, the president of Intercontinental Asset Management, seems to think we need higher tax rates. I disagree.

He correctly explained the Laffer Curve, which relates tax revenue and tax rates. His reading of the historical record leads him to say the high tax revenue and budget surpluses of the late 1990s were due to raising the top tax rate to 39.6 percent in 1993.

We must realize that maximizing the federal tax revenue is not an official policy goal. The goals are low unemployment, low inflation and high GDP growth. Now if tax revenue is spent wisely on things like education and infrastructure, it can help the economy grow. But this is not always the case.

Higher tax rates hurt economic incentives. Investment decisions are made at the margin, based on after tax income.

As tax rates rise, some investments are no longer viable. Less investment, less growth. A slight change makes a big difference in the long run. For example, in 2010, liberal economist Paul Krugman mentioned that the per capita GDP since 1980 had grown 1.95 percent annually in the U.S. and 1.83 percent in the European Union, hinting that their higher tax rates were not a problem. But, if per capita income was $20,000 in both the U.S. and the E.U. in 1980, the per capita income now would be $1,372 higher in the U.S. at those annual growth rates. After 100 years, the U.S. income level would be 12 percent higher.

The harm taxes do to economic efficiency is called “deadweight loss.” It grows exponentially; more harm is done in raising rates from 35 to 40 percent than in raising rates from 30 to 35 percent. If the Bush tax cuts expire, some Americans in states like New York (which has its own income tax) will pay marginal tax rates of over 50 percent, if you include additional taxes to pay for Obamacare.

Roth says we should take a lesson from the 1990s. But in 1997 President Clinton agreed to cut the capital gains tax to 20 percent It is possible that the high tax revenue of the late 1990s was due to a fast growing economy which in turn was caused by the high tech boom and low oil prices.

Economist Alan Reynolds has said, “The unexpected revenue windfalls in President Bill Clinton's second term were largely a consequence of lower tax rates on capital gains.”

William McBride of the Tax Foundation found in a survey of studies that “lower-tax economies are more productive and that raising taxes has negative dynamic effects on revenue collection.”

Spending may be a bigger issue than tax revenue (Roth did call for less spending). As former World Bank Group president Robert Zoellick recently said, “Federal spending has traditionally been about 18-19 percent of the U.S. economy. It has now surged to 23-24 percent.”

Leszek Balcerowicz, the former central banker of Poland, says that countries grow rapidly out of recessions when they cut spending since this increases confidence in markets. Let's give that a try.

Cyril Morong, Ph.D., is an associated professor of economics at San Antonio College.

President Obama Vs. Nassim Nicholas Taleb: Who Has The Best Statement For NATIONAL ENTREPRENEURS' DAY?

Here is what President Obama said:

“During National Entrepreneurship Month, we celebrate the hard work, ingenuity, and courage of our thinkers, doers, and makers. I call upon all Americans to celebrate November 16, 2012, as National Entrepreneurs' Day”

Click here to learn more.

Nicholas Taleb has also proposed a NATIONAL ENTREPRENEURS' DAY. Here is the statement he wants read:

“Most of you will fail, disrespected, impoverished, but we are grateful for the risks you are taking and the sacrifices you are making for the sake of the economic growth of the planet and pulling others out of poverty. You are the source of our antifragility. Our nation thanks you.”

Click here to learn more. Taleb is the author of such books as Antifragile: Things That Gain from Disorder and The Black Swan: The Impact of the Highly Improbable.

Great Blog-Entrepreneurship Matters

Here is the link

Entrepreneurship Matters

It is by Paul McManus. It is "An exploration of entrepreneurial thought and action for high impact entrepreneurial builders & leaders, social innovators and global changemakers."

McManus teaches entrepreneurship and entrepreneurial leadership at the School of Management and leads the entrepreneurship program at Boston University.

The Sound of a Dry Martini: Remembering Paul Desmond-Great Jazz CD by Brent Jensen

Paul Desmond played the alto saxophone with the Dave Brubeck Quartet. He said that he wanted to sound like a dry martini. On this CD, Jensen pays homage to Desmond and it sounds great.

Click here to go to the Amazon page for the CD. You can listen to samples of all the songs. "Take Five" is one of them.

Click here to go to Jensen's home page. It has links to videos of his performances.

Greece Tries Again to Cut Tax Evasion

Click here to read The Wall Street Journal article. Excerpt:

"Customers of all sorts of businesses in Greece will be able to walk away without paying if they don't receive a record of their transaction, under rules set to take effect soon.

Restaurants—seen as among the worst offenders, in part because much of their business is transacted in cash—will be required to add a notification about the right to refuse payment to their menus. But everyone, from doctors and lawyers to plumbers and taxis, also is liable to be stiffed if they don't give receipts.

The new regulations are the latest effort by the cash-strapped Greek government to crack down on endemic tax evasion—adding an extra incentive for businesses to issue receipts. The receipts produce a record of the transactions, and authorities use that record to calculate taxes owed by the business.

"With this measure the consumer is protected and a bold step is taken against tax evasion," said Athanasios Skordas, Greece's deputy development minister.

The "shadow economy" accounts for about 24% of Greek gross domestic product, according to a study by Margarita Tsoutsoura of the University of Chicago Booth School of Business. Tax dodging costs Greece about €28 billion ($36 billion) a year, an amount equivalent to roughly 15% of annual economic output, the study says."

Here is a related story. Greece takes bottom EU spot in global corruption index. What would Plato or Socrates say?

More On Poverty

Last year I had a link about the Gini coefficients for wealth. Go to What has happened to the distribution of wealth in recent years?

To see international data on poverty rates click on this site from the OECD

To see international data on the distribution of income click on this other site from the OECD

To see the Census Bureau's poverty and income report press release, go to Income, Poverty and Health Insurance Coverage in the United States: 2011

For more Census Bureau data, go to Poverty Data and Poverty Main

Below is a graph of some poverty rates over time. The source is Table 2. Poverty Status, by Family Relationship, Race from the Census Bureau.

Some Possibly Surprising Facts About Poverty

I have been covering poverty and the distribution of income in micro this week. Here are some interesting links from the blog of economist Mark Perry called Carpe Diem. He actually has moved recently to a new location, so click here to see it.

More on The U.S. Poor Getting Richer, And Being Envy of the World's Poor. Here he shows how the percentage of poor households in America that owns various appliances and conveniences is very high, often about as high as the entire population of Sweden.

5 Problems With Census Poverty and Income Data. This one shows that over time, median household income per household member has been increasing. Part of the problem with household income numbers is that they don't ofteh adjust for declining size of household.

Our Poor Are the Envy of the World's Poor. Here he mentions that: "In 1971, only about 32 percent of all Americans enjoyed air conditioning in their homes. By 2001, 76 percent of poor people had air conditioning." It is true for other appliances as well.

Consumption Equality 7X > Than Income Equality. Here he mentions that:

"The bottom fifth earned just $9,974, but spent nearly twice that — an average of $18,153 a year. How is that possible? Those lower-income families have access to various sources of spending money that doesn’t fall under taxable income. These sources include portions of sales of property like homes and cars and securities that are not subject to capital gains taxes, insurance policies redeemed, or the drawing down of bank accounts."

New Mpls. Federal Reserve Bank Study Shows Significant Earnings Mobility Between 2001-2007. Here he shows that 44% of the people in bottom quintile in 2001 had moved to a higher quintile in 2007.

Pew Research Calls It "Hollowing Out of the Middle Class," But 150 Americans Moved Up for Every 100 Who Moved Down Between 1971 and 2011. He mentions that:

"Between 1971 and 2011, the share of adult Americans in the “middle class” decreased by ten percentage points from 61% to 51%. Of that 10% of American adults who left the middle class, 6% moved up to the “upper-income” category and 4% move down to the “lower-income” category."

Census Data Show Significant Income Mobility. Here says that:

"From 1996 to 2005, we have the income mobility data for income quintiles. Of those filers who were in the lowest 20% in 1996 and who also filed in 2005, 42.4% remained in the bottom 20% but 57.6% had moved up to a higher quintile: 28.6% were in the next highest quintile, 13.9% were in the middle quintile, 9.9% were in the second highest quintile, and 5.3% were in the highest quintile."

The Rich Are Getting Richer and the Poor Are Getting Richer; The Good Old Days Are Now. In 1971, 88.3% of all American households had a refrigerator. Today, 98.5% of poor households do. This is true for many other goods. More poor people have them now than did the average people in 1971. In 1973, the average worker had to work 89 hours to buy a refrigerator. Today it is only 23 hours. This is true for many other goods.

Bad News for 2 Americas Myth: The Poor Got Richer. Here is one thing it says, as of 2007: "The CBO reports that low-wage households with children had earnings after inflation in 2005 that were about 80% higher than in the early 1990s."

Real Per Capita GDP Over Time

I used data from the Commerce Department's Bureau of Economic Analysis. The graph below shows GDP per capita in 2005 dollars since 1929. It has increased 2.06% per year, on average, since 1929 (that is a compound annual rate, as are the others I mention below).

I also wondered how much it was per worker. Starting in 1946, the Bureau of Labor Statistics started counting only workers who were 16 or older. So I start there. Real GDP per worker since then has increased 1.67% a year, on average.

 



Here is GDP per capita in 2005 dollars since 1929. That average annual growth rate is 1.87%.

 

An Essay In Honor Of "Small Business Saturday" And Entrepreneurs Everywhere

Tomorrow is "Small Business Saturday." Here is what an article from the San Antonio Express-News says about it:

"American Express created the day three years ago, it says, to help small businesses struggling during the recession. The credit and charge card company encourages cardholders, who have registered in advance online to make purchases with their cards in exchange for a $25 rebate paid for by American Express, if they buy something at a participating business. American Express won't say how much the promotion costs, but Susan Sobbott, president of American Express OPEN, the company's small business division, says it is a considerable amount."

Click here to read the article. My essay on how entrepreneurs are like heroes from mythology is below. Candace Allen has said that

"Just as the society that doesn't venerate winners of races will produce fewer champion runners than the society that does, the society that does not honor entrepreneurial accomplishment will find fewer people of ability engaged in wealth creation than the society that does."

That is from her essay The Entrepreneur as Hero. Many others have said that entrepreneurs are heroes. I provide more information on this after my essay. So here it is. It was originally published in The New Leaders: The Business Bulletin for Transformative Leadership, November/December 1992. Title: The Calling of the Entrepreneur

Entrepreneurs are heroes. They are not like heroes, they are heroes. Heroes and entrepreneurs are called to and take part in the greatest and most universal adventure that life has to offer: the simultaneous journey of self-discovery, spiritual growth, and the personal creativity they make possible. In fact, the entrepreneur’s journey closely resembles the journey of the “hero” in mythology, as outlined in the book The Hero With a Thousand Faces, by Joseph Campbell. There is an amazing and profound similarity between not only the journey that entrepreneurs take and the adventure of heroes but also in their personality traits. The comparison is profound because the myths are about universal human desires and conflicts that we see played out in the lives of entrepreneurs.

But what is the hero's adventure? Campbell writes "The standard path of the mythological adventure of the hero is a magnification of the formula represented in the rites of passage: separation-initiation-return, which might be named the nuclear unit of the monomyth. A hero ventures forth from the world of common day into a region of supernatural wonder; fabulous forces are there encountered and a decisive victory is won; the hero comes back from this mysterious adventure with the power to bestow boons on his fellow man." How is the hero's adventure similar to the entrepreneur's adventure?

The hero's journey begins with a call to adventure. He or she is awakened by some herald which touches his or her unconscious world and creative destiny. The entrepreneur, too, is "called" to the adventure. By chance, he or she discovers a previously unknown product or way to make a profit. The lucky discovery cannot be planned and is itself the herald of the adventure.

The entrepreneur must step out of the ordinary way of producing and into his or her imagination about the way things could be to discover the previously undreamt of technique or product. The "fabulous forces" might be applying the assembly line technique or interchangeable parts to producing automobiles or building microcomputers in a garage. The mysterious adventure is the time spent tinkering in research and development. But once those techniques are discovered or developed, the entrepreneur now has the power to bestow this boon on the rest of humankind.

Heroes bring change. Campbell refers to the constant change in the universe as "The Cosmogonic Cycle" which "unrolls the great vision of the creation and destruction of the world which is vouchsafed as revelation to the successful hero." This is similar to Joseph Schumpeter's theory of entrepreneurship called “creative destruction.” A successful entrepreneur simultaneously destroys and creates a new world, or at least a new way of life. Henry Ford, for example, destroyed the horse and buggy age while creating the age of the automobile. The hero also finds that the world "suffers from a symbolical deficiency" and "appears on the scene in various forms according to the changing needs of the race." The changing needs and the deficiency correspond to the changing market conditions or the changing desires for products. The entrepreneur is the first person to perceive the changing needs.

Regarding personality traits, the hero and entrepreneur are risk-takers and creators. But what is the source of their creativity? People become creative when in the words of Campbell, they "follow their bliss." This is the message of mythology. It means you should engage in an activity, pursue a career or entrepreneurial venture because it is what you love to do and it gives you a sense of personal importance and fulfillment, not because the social system dictates that you do so. The drive comes from within. It is this courageous action that opens up doors and creative possibilities that did not previously exist. This is the journey of self-discovery and spiritual growth. Although it may be long, painful, and lonely, it is very rewarding.

Both the entrepreneur and hero are aided by mentors, are humble enough to listen to others in order to learn (and thus become creative), and face a road of trials where they must continually slay the demons and dragons of their own unconscious (such as fear, their egos) in order to discover their creative ability which ultimately comes from giving themselves up to a higher power.

Ultimately, they become selfless and can see the creative possibilities that the universe offers. They become masters of two worlds, one of imagination and creativity and the other of material things and business. This mastery makes it possible for them to bestow the boon.

********

To learn about all the other writers and experts who have said that entrepreneurs are heores, see my paper, Who Says Entrepreneurs Are Heroes? (Remarks prepared for the first HERO'S JOURNEY ENTREPRENEURSHIP FESTIVAL, March 31st, 2007 at Pepperdine University). You might need to save it first as an MS Word file and then open it.

Joseph Campbell, the author of the book The Hero With A Thousand Faces (which was one of the inspirations for the Star Wars movies), said in an interview that entrepreneurs were heroes. See Joseph Campbell on Entrepreneurship. If you want to hear that interview, click on this link. It is a video of my Pepperdine presentation. It comes up at about the 15 minute mark.

Click here to learn about Elliot McGucken's "Hero's Journey Entrepreneurship Festival"

To read about how important Schumpeter is and will be, go to A Vision for Innovation, Growth, and Quality Jobs by Lawrence H. Summers, former head of the National Economic Council.