Fallacies of Capitalism 9 : The Entrepreneurial Genius Fallacy

 The Entrepreneurial Genius Fallacy

The "entrepreneurial genius" fallacy is aptly described by economist Mariana Mazzucato, who notes that it "overlooks the vital role of collective efforts, public infrastructure, and social support in fostering innovation and economic growth." While entrepreneurs undoubtedly contribute to economic progress, their success is intricately intertwined with broader societal factors.

As Nobel laureate Paul Romer eloquently emphasizes, "Economic growth occurs whenever people take resources and rearrange them in ways that make them more valuable." While entrepreneurs play a role in resource rearrangement, it is the collective investment in public infrastructure that enables them to thrive. Bridges and roads, as urbanist Jane Jacobs highlights, "are public goods that create more value than they consume," providing the vital arteries for commerce and enabling entrepreneurs to transport goods, connect with customers, and access markets.

The "entrepreneurial genius" fallacy disregards the indispensable role of knowledge and education, as emphasized by economist Joseph Stiglitz. He reminds us that "innovation doesn't happen in a vacuum" but requires a well-educated and skilled workforce. Entrepreneurs may provide vision and ideas, but it is the collective efforts of educators, researchers, and institutions that provide the foundation of knowledge and skills. The great innovations, as echoed by inventor Thomas Edison, are often the result of "one percent inspiration and ninety-nine percent perspiration" of countless individuals working collectively.

Moreover, a thriving entrepreneurial ecosystem is a testament to the power of collective support. As entrepreneur Reid Hoffman observes, "No one ever makes a billion dollars. You take a billion dollars." Entrepreneurship flourishes within supportive environments that provide access to capital, mentorship, and networking opportunities. These ecosystems involve various actors and institutions, as innovation scholar Carlota Perez suggests, forming "a collaborative and symbiotic space" that fuels entrepreneurial success.

Lastly, the significance of social safety nets in fostering entrepreneurship cannot be overstated. As economist Joseph Schumpeter asserts, "Entrepreneurial capitalism is not only the most efficient but also the most just form of economic organization precisely because it offers greater scope to human freedom than any other." Robust social support systems ensure individuals can take calculated risks and pursue entrepreneurship without fear of falling through the cracks. Nobel laureate Amartya Sen underscores this, stating, "The extent of entrepreneurship depends on the extent of the social opportunities that people have reason to choose."

In conclusion, recognizing the fallacy of the "entrepreneurial genius" narrative involves appreciating the contributions of collective efforts, public infrastructure, and social support in fostering innovation and economic growth. Entrepreneurs, as catalysts, rely on the foundation built by society as a whole. As economist Robert Reich eloquently sums it up, "Success is not the measure of one's worth; it's the measure of how many shoulders one stands on."

Ramanujan and Salam — what inspired them?

Pervez Hoodbhoy in The Dawn

SRINIVISAN Ramanujan (1887-1920) and Muhammad Abdus Salam (1926-1996), two intellectual giants of the 20th century, were born in the same corner of the world. Of humble origin and educated in local schools, they nevertheless rose to dizzying heights in the arcane world of theoretical science. Few others on the subcontinent enjoy their iconic status.

What I shall address below is that both attributed their works to some divine agency. Some of their devotees see this in validating their own respective belief system. With the rise of Hindutva in India, and the violent persecution of Ahmadis in Pakistan, these claims assume considerable importance. Hence a careful, impartial examination is called for.

No mathematician has a story more romantic than Ramanujan’s. Many books, plays, and movies — such as The Man Who Knew Infinity (2015) — dwell upon this enigmatic figure. Drawing upon deep intuition, Ramanujan created new concepts in the theory of numbers, elliptic functions and infinite series. Even full-blown mathematicians take years to grasp his complex ideas.


Exceptional genes plus fortunate circumstances is why some become maths-science superstars.

Born in Madras to a low-level clerk, this young Brahmin boy was steeped in tradition, sang religious songs, attended temple pujas, and was a strict vegetarian. But by age 12, he was inventing sophisticated theorems and unwittingly duplicating some results of European mathematicians of the previous century. He flunked college twice for lack of interest in anything but mathematics — in which he excelled. His awestruck teachers could not decide whether he was a genius or fraud.

At 16, encouraged by one of his teachers, Ramanujan sent off a letter to the renowned pure mathematician G.W. Hardy at Cambridge University. It was accompanied by theorems densely packed into nine pages. Hardy was stunned and arranged for him to travel to England. Ramanujan duly obtained permission from the family goddess Namagiri, consulting appropriate astrological data before his voyage overseas.

At age 32, Ramanujan was dead. He had returned to Madras exhausted, half-famished and fed up with English winters. But even on his deathbed, his pen scrawled out profound results. A century later these still intrigue the brainiest of mathematicians and string theorists. He attributed his exceptional qualities to the psychic visitations of Namagiri who would whisper equations to him. Sometimes, he said, “she wrote on my tongue”. He told colleagues, “An equation for me has no meaning unless it represents a thought of God.”

This was how Ramanujan saw it. But how does one explain that Euler, Bernoulli, Gauss, Cantor, Hilbert and Gödel were non-Brahmin mathematicians who stood still taller? The edifice of modern mathematics owes largely to them, not to Ramanujan. Some were ardent Christians, others agnostic or atheistic. Nobody knows how to explain their feats.

Curiously, Abdus Salam, then a 19-year-old student at Government College Lahore, wrote his very first paper proposing a simpler solution to an intriguing mathematical problem posed about 20 years earlier by Ramanujan. He ended his paper by triumphantly declaring: “His [Ramanujan’s] solution is much more laborious”.

This was Salam’s debut into the world of high mathematics. Born into a conservative religious environment in Jhang — then a village-town — this child prodigy rapidly outpaced his teachers. Fortunately they bore him no grudge and helped him move on to Lahore. The next stop was Cambridge, where he excelled. By the early 1960s, he was one of the world’s top particle physicists, ultimately winning 20 international prizes and honours including the Nobel Prize in 1979.

In his later years, Salam gave numerous public lectures and interviews, recorded on camera and in print, locating his source of inspiration in his religious belief. In particular he said the concept of unity of God powered his quest for the unification of nature’s fundamental forces as well as his search for ever fewer numbers of elementary particles.

For me, to engage on a sensitive matter with one so senior and superior was not easy. But sometime in 1986 I picked up the courage to ask Salam the obvious question: both he, who thought himself a believer, and Steven Weinberg, an avowed atheist, had worked independently on unifying two of nature’s four fundamental forces and yet had arrived at precisely the same conclusions. How?

Salam gave his answer in the preface he wrote for my book on Islam and science (1990), where he stated: “I can confirm that he [Hoodbhoy] is right…”, and then went on to explicitly clarify that any bias towards the unification paradigm in his thinking was only unconsciously motivated by his religious background.

There is not the slightest doubt that Salam used exactly the same tools as Weinberg did — principally quantum mechanics and relativity theory — and did physics exactly as other physicists do (but better than most). His political and religious views were irrelevant to his work. Let’s note that although they are giants of physics, Salam and Weinberg stood on the shoulders of still greater giants — Einstein, Pauli, Dirac, Wheeler, and Feynman — whose personal philosophies of life vastly differed from each other.

Salam sourced his inspiration to his religious beliefs, while Ramanujan claimed direct transmission from his gods. These claims cannot ever be proved or disproved. It is also irrelevant here that Salam thought of himself as a Muslim whereas, by Pakistani law, he is not.

How can prodigious talent blossom in the absence of rigorous scientific training? Two factors explain Ramanujan’s and Salam’s successes. First, nature sometimes gifts an individual with exceptional innate mathematical ability. This is associated with brain circuits in the parietal lobe and acquired through genetic transmission. Second, by good fortune, Ramanujan and Salam managed to escape into a scholarly environment — Cambridge Uni­ver­sity — where their genius could flower. Had either stayed back home he would be unheard of today.
It is usual to take pride in the geniuses belonging to one’s own tribe. The ancient civilisations of China, India, Greece, Arabia, and modern European civilisation all claim superiority over others because of the creations of their most brilliant minds. But in fact an individual’s exceptional genes and fortunate circumstances — not some supreme transcendence — are the real reasons. While sources of inspiration do differ, empirically and logically deduced results don’t. Science and its heroes belong to all humankind, not to any one tribe.

Trump an evil genius who wrongfoots opponents who underestimate him

Gideon Rachman in The Financial Times 

When Donald Trump described himself as a “very stable genius”, even some of his supporters sniggered. The US president is clearly not a genius in any normal sense of the word. Rex Tillerson, his own secretary of state, is reputed to have described his boss as a “f***ing moron”. 

 But Mr Trump has a legitimate claim to three other kinds of “genius”: political genius, instinctive genius and evil genius. Moral disgust with Mr Trump means that his opponents are reluctant to credit him with any kind of intelligence or success. But that kind of thinking, while understandable, is also dangerous. It is one reason why the president frequently wrongfoots his opponents. 

 As Mr Trump pointed out, when making his own immodest claim to “genius”, he achieved something unprecedented in modern American history. He was a complete political outsider who won the presidency on his first attempt. His enemies would point to the current government shutdown to suggest that the president is nonetheless completely unfit to govern. But Trump supporters will respond by pointing to a growing economy, and the passage of the first large-scale tax reform in more than 30 years. 

 Mr Trump campaigned on themes — protectionism, isolationism, opposition to immigration — that the political establishment was convinced were sure-fire losers, and even un-American. His political instincts told him otherwise. Steve Bannon, Mr Trump’s estranged campaign manager, was the man with the grand theories about economics and culture, larded with references to obscure and sinister European philosophers. Mr Trump was guided by an instinct that told him that he could smash taboos and not just fail to pay a price, but actually be rewarded. 


 His ideas about race and immigration are nasty — but they are also widely shared, and not just in America 


The number of Mr Trump’s offences against truth and decency are too long to remember, let alone list. But they have a common theme. Time and again the mainstream media (of which I am a proud member) would proclaim that he had gone too far this time and that he was surely finished. Time and again, Mr Trump would prove them wrong and come back stronger. The things that failed to kill him politically — in particular racism and misogyny — actually made him stronger. 

 That is why it is also legitimate to describe Mr Trump as an “evil” genius. He has deliberately used lies and offensive language to stoke up America’s culture wars and racial tensions, confident that he will benefit politically. There is a direct connection between the current row about the president’s complaint about immigration from “shithole countries” and the campaign that launched his political career — the “birther” lie that President Barack Obama was not born in the US. 

 Mr Trump and many of his supporters are tacitly defending the idea of America as a “white country”. The president’s opponents are right to describe this as a racist vision. But they may be wrong in thinking that this is a decisive argument. By the 2040s, the US is predicted to be “majority-minority”. Whites will be still be the largest ethnic group in the country, but they will be less than 50 per cent of the population. By railing against Mexicans, Muslims and Haitians, and calling for more immigration from Norway, Mr Trump is appealing directly to voters who feel angry about that racial and demographic shift. The current government shutdown is also linked to these issues, since it is caused by the president’s refusal to accept an amnesty for illegal immigrants who arrived as children. 

 It should never be forgotten that a majority of white Americans voted for Mr Trump. Are these voters likely to turn away in disgust now because of the president’s “shithole country” comments? Or are they more likely quietly to agree? The record suggests that Mr Trump knows exactly what he is doing. 

 His ideas about race and immigration are nasty — but they are also widely shared, and not just in America. Japan accepted 28 refugees in the whole of 2016, and precisely three in the first half of 2017. It is virtually impossible for non-ethnic Chinese to gain citizenship in the People’s Republic of China, whose citizenship laws make explicit reference to “Chinese blood”. The EU has been split down the middle by the Polish and Hungarian governments’ refusal to accept EU-mandated quotas of refugees. The demand to “take back control” of British borders was fundamental to Britain’s Brexit vote. And the decline in Angela Merkel’s political fortunes in Germany has been closely linked to the chancellor’s decision to open her country’s borders to more than 1m refugees. 

 No European country has yet elected a Trump figure. But the continent’s politicians are tying themselves in knots trying to combine liberal principles with practical politics. President Emmanuel Macron speaks the language of tolerance, but is actually speeding up deportations of illegal migrants and tightening border controls. And nobody in Ms Merkel’s CDU party is campaigning for the Hungarian government to rip down the border walls that helped to stop the flow of refugees into Germany. 

 The fears and hatreds that the US president exploits exist well beyond his base. Liberal politicians need to find more effective policies and language to deal with those fears — or the “very stable genius” may continue to outsmart them.

It takes more than a stroke of genius to become a true champion

Dominic Lawson in The Independent

When does talent become genius? We all have a view; but when asked to be precise, it's hard not to sink into the hopelessly circular argument that we know what genius is when we see it. Yet anyone who watched Roger Federer's forensic dismantling of Andy Murray in the men's final at Wimbledon would have no problem in identifying the Swiss as a genius, and that simple fact as Murray's nemesis.

Thus a familiar-sounding headline on one report of the match was: "Only one winner when talent meets genius." Familiar sounding, because it repeats what was written the last time the two met in a grand slam final, the 2010 Australian Open: "Federer's genius alone beats Andrew Murray". Murray cried after that one, too. Well, it must be frustrating when you push yourself to the limits and beyond, and the opponent wins with apparently effortless ease.

Except it isn't like that at all. Although we tend to think of genius as something akin to magic, a kind of short-cut to mastery of the elements, it is nothing of the sort. A proper investigation of the careers of the supreme achievers, whether in sport or other fields, reveals that they are based above all on monomaniacal diligence and concentration. Constant struggle, in other words. Seen in this light, we might define genius as talent multiplied by effort. In cricket, this would be true of Sachin Tendulkar; in chess, Bobby Fischer.

I was at a dinner with that supreme raconteur among philosophers, Isaiah Berlin, when he was asked how he would sum up genius. He immediately recalled the ballet dancer Vaslav Nijinsky, who was questioned about how he managed to leap in the way he did. The Russian replied that most people, when they leapt in the air, would come down at once, but: "Why should you come down immediately? Stay in the air a little before you return, why not?" That effortless ease defined genius, said Berlin. To watch Federer at his greatest is to see something similar to Nijinsky's description: the movement of his body appears to defy the laws of gravity, as if hovering above the surface of the planet, free of all weight or friction. Yet in logic we know that this cannot be. He is constructed of the same matter as the rest of humanity, with nothing remotely abnormal or other-worldly in his skeleton or musculature.

In a wonderful 2006 essay entitled "Federer as Religious Experience", David Foster Wallace wrote that "Roger Federer appears to be exempt from certain physical laws... a type that one could call genius or mutant or avatar, a creature whose body is both flesh and, somehow, light." Yet this is nothing more than an illusion – one which the performer will be keen to encourage, both to thrill the public and to intimidate his opponents. Nijinsky, for example, must have known very well that his astounding entrechats and grands jetes were the product of thousands upon thousands of hours of excruciating practice, without which his talent could never have evolved beyond dilettantism.

By the same token, the greatest talents of our age appreciate that in a brutally competitive world, to skip a day of such rigorous training is to risk decline and even mediocrity. If you saw the film [Itzhak] Perlman in Russia – about the supreme violinist's 1990 tour of that country – you will probably have been struck by his great discomfiture when asked to perform a piece spontaneously on a visit to the Moscow Conservatory. "But I haven't practiced today," Perlman says; and yet when you watch the Israeli play in concert, he can make even the most appallingly difficult pieces seem like a bit of fun, or as easy as drawing breath. It is, as the saying goes, the art that disguises art.

Perhaps the idea of the effortless genius is partly born of the need to reassure ourselves in our relative laziness: if genius is simply something innate, God-given and unimprovable, then perhaps we can also do as well as we are able without making extraordinary efforts. Unfortunately, this is not so: and we must recognise that what the greatest musicians and sportsmen have which the rest of us lack is not just an aptitude, but a fierceness of desire and a commitment to self-improvement which we can scarcely begin to comprehend. Nowadays, Federer seems a serene spirit, but as a young, up-and-coming player, he was a noted racquet hurler, with no less of an inner rage to succeed than, for example, John McEnroe.

In the purely cerebral sport of chess, the one living player most often described as a genius is the Norwegian Magnus Carlsen – who at 19 became the world's highest-ranked grandmaster. Yet his father Henrik told me that what had first alerted him to Magnus's possibilities was the fact that as a toddler he would spend hours doing 50-piece jigsaw puzzles; the very young Magnus had an astonishing capacity for hard work and concentration– which is, after all, the very essence of learning.

Francis Galton, the slightly creepy founder of eugenics, sought to define genius by reference to an inherited form of intelligence, which he thought could be measured via the analysing of a person's reaction time and sensory acuity: this Galton referred to as "neurophysiological efficiency". You might think that, within sport, the activity most requiring preternaturally quick reactions would be Grand Prix motor-racing. Yet viewers of the BBC1 series Top Gear might recall Jeremy Clarkson engaging in a competitive test of reaction times with Michael Schumacher,: the lumbering Clarkson demonstrated that his reactions in a hand slapping contest were the equal of the then Formula One champion's.

This is actually what one should expect: we all have the same basic reaction times, which are determined by the nervous system rather than the brain – as evidenced by the fact that we all pull our hand away from a flame with identical suddenness. The difference between us and the champions is that they have trained their minds to process information with astonishing speed in situations requiring complex assessment. Watch how Federer reacts in the less than half a second it takes for a first serve from Murray to reach the opposing baseline and you see just what a special talent honed by obsessive determination and hundreds of thousands of hours of practice can achieve.

Conducting the on-court interview after his victory, Sue Barker began: "Genius tennis?" "Yes," Federer replied, deadpan. If only it were so simple; and the fact that it looks so simple is the strangest thing of all.