Mastery vs. Profit as Motivation for the Entrepreneur : How Crony Policies Shape Business
Desire for mastery is an important human motive distinct from the profit motive. In business, mastery involves a product or service, and validation occurs through comparison with other entrepreneurs' products. Consumers' choices validate entrepreneurs' performance. We term an entrepreneur's intrinsic desire to produce a good product mastery seeking, and we contrast mastery seeking with profit seeking. Success often coincides with profit, but the two motives are different and can diverge. We explore mastery seeking's implications for the economics and politics of government privileges and favors for business. Crony polices can disrupt the consumer choice process and the validation of performance. Crony policies may increase profit but reduce realized performance for entrepreneurs, reducing the labor supply of entrepreneurs motivated by competition. A nation's level of cronyism could affect the types of individuals who become entrepreneurs, with a high level of government intervention pushing success seekers to pursue mastery in other endeavors, with adverse implications for innovation and growth in the economy