Carl Schramm — Economics of Aid vs. Entrepreneurship

Economist, USA

Increasingly we’re understanding that this concept of just flooding a country with aid is actually destructive to the development of creative labor markets.

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Carl Schramm—An Evangelist for Entrepreneurship

Carl Schramm is recognized internationally as an authority on entrepreneurial innovation, job creation, and economic growth. The Wall Street Journal has cited his "prescient" work and The Economist hailed him as "the evangelist of entrepreneurship." He is president and CEO of the Ewing Marion Kauffman Foundation, the world's premier organization dedicated to creating new firms and understanding the role they play in economic growth. The Kauffman Foundation is the leading private funder of economic research related to growth and innovation in the United States. The Foundation also plays a leading role in educational reform.

Carl Schramm—An Entrepreneurial Voice in Economics

Schramm is credited with opening a new field of inquiry—expeditionary economics. His essay in Foreign Affairs (April 2010) describes this emerging area of economic thought, which focuses on rebuilding economies in post-conflict nations, including Iraq and Afghanistan. Schramm's research on how entrepreneurship fuels economic expansion led him to play a prominent role in the December 2009 White House jobs summit. Schramm chaired the National Advisory Commission on Measuring Innovation during George W. Bush's presidency. In addition, he has advised government leaders worldwide on promoting job growth and economic expansion. In 2009, he was appointed by the Prime Minister of Singapore to serve on the country's Research, Innovation and Enterprise Council. Before joining Kauffman, Schramm served as a professor of health finance and policy at The Johns Hopkins University, founded several companies in health care finance and information technology, served as executive vice president of Fortis, and established a merchant banking firm. He was chairman of the Maryland Health Services Cost Review Commission and a member of the Maryland Health and Higher Educational Facilities Authority.

Carl Schramm—Authorship and Education

Schramm is a prolific writer whose commentary often runs in publications such as Foreign Affairs, The Wall Street Journal, and The Financial Times. He frequently appears on CNBC and Fox Business News. His two books, Good Capitalism, Bad Capitalism (with Robert Litan and William Baumol, now published in eight languages) and The Entrepreneurial Imperative, are considered international classics in their field for their insights into economic growth. He is a member of the Council on Foreign Relations and a Batten Fellow in the Darden Graduate School of Business at the University of Virginia. He earned degrees in economics and law and holds several honorary doctorates. In 2005, he received the University of Rochester's George Eastman Medal.
[Bio adapted from the Kauffman Foundation]

  • Freedom and Education

    First is political freedom. So aid agencies, instead of enforcing and supporting corrupt political regimes, actually have to help people at the ground examine the question of what it is that democracy is about. Second thing we have to do is actually develop systems of education. The singular issue is improving human capital. The smarter people get (this is virtually a rule in the world) the richer the society in which they operate will become. This is the central issue. So it’s individual freedom and it’s education. And with both of those in place, you will watch per capita income grow.

  • Foreign Aid and the Dignity of the Poor

    The most curious part of [aid], and sort of the tragic part of this, is, the rich countries have one form of economy, and they are hell-bent on expressing a different form of economy for poor people. And I think, in many ways, implicitly, the message in our aid program is, that the poor of the world can’t develop to be successful, they can’t be as smart as the rich of the world. It goes to the question of the dignity of the poor. And aid in many regards, while it’s terribly well meaning, the folks who advance this conception are the best of meaning people, but our record in the world is, is absolutely clear; with the best of intentions, we’ve often inflicted the worst of outcomes on unwitting people.

  • Population and the India Example

    When I was a graduate student not all that long ago, about 30 years ago, the received wisdom in every single book you would open suggested that China and India would never ever be self-sufficient in food, particular in India. And when I left graduate school, the absolute certain sense, from the best thinkers in the world was it was only a matter of time until there would be political upheaval in India, the population would outrun the ability of the land to produce sufficient food, and that we’d never see the development of any wealth in India at all. Now I was just in India. If one looks in India today, you see not just food self-sufficiency. The fact is, in India, India exports food, for heaven sakes. India has a teeming population and there’s a growing sense that population growth is actually good for economic growth.