“When the capital development of a country becomes a by-product of the activities of a casino, the job is likely to be ill-done,” John Maynard Keynes wrote in 1936. A half century later, Keynes’s fear seems just as warranted as it was during the Great Depression. That it does is a sign of how thoroughly the culture of the new American paper entrepreneur has come to dominate the American economy of the 1980s. Paper entrepreneurialism not only reflects how we do business, it reflects how we think about business.
As recently as 1974, it was not this way. In that year an economic turning point, of sorts, occurred. The International Nickel Company decided to buy up enough shares in the Electric Storage Battery Company to gain control over the board of directors of Electric Storage and thus allow International Nickel to effectively run the company. The managers of Electric Storage Battery did not want International Nickel to run the company, because they didn’t believe that International Nickel could do a very good job of it, and they didn’t want to lose their own jobs. They thus regarded International Nickel’s act as hostile, as it in fact was—the first in a long and not-so- distinguished line of unfriendly initiatives....
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